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Legal Alerts

Finally Enacted: Project Bonds, an Alternative Financing Method for Mega Project

Legal Alerts
Capital Markets
Financial Institutions

Recent development

On 17 July 2021, the Capital Markets Board of Turkey published the communique on project bonds regulating project-based securities (PBS) and project finance funds, almost a year after its draft was made public in August 2020. You may access our alert on the draft communique here.

What’s new? 

  • PBS will be issued for the financing of public services projects such as transportation, infrastructure, energy, industry, technology, communications or health in return for (i) project income and other rights arising from the financing of a project; or (ii) receivables arising from loans provided for financing of various projects.
  • Project finance funds, which will be established by Turkish banks and investment institutions upon the approval of the Capital Markets Board, will be responsible for the management of the portfolio backed by assets that are subject to project financing, consisting of money and/or other assets raised for a PBS.
  • The communique provides several tools to improve the quality of the portfolios of funds, such as guarantees and collaterals to be provided by originators/founders or third parties and, for this purpose, it entitles originators/founders to purchase the PBS to be issued.
  • PBS may be issued: (i) domestically via a public offering; (ii) to qualified investors without a public offering; or (iii) via private placement with a unit nominal value of TRY 100,000. PBS can also be offered in international markets. The proceeds of the issuance will be used for financing the relevant project, and the investors investing in the fund will make a long-term profit from the fund’s income.


The enactment of the project bonds legislation will enable long-term public projects to be financed with the effective use of alternative financing methods within the scope of the objectives as set out in the Economy Reform Package.

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