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Turkey southern highway plan gets 1.7 bln euro financing, source says

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  Published in Automotive and Transportation on Monday, October 6th 2025 at 13:03 GMT by reuters.com
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Turkey Secures €17 billion to Complete Southern Highway Project – A Boost for Regional Connectivity and EU‑Turkey Relations

By Reuters correspondent
October 6, 2025

Turkey’s long‑planned Southern Anatolian Highway (SAH), a 1,600‑kilometre (1,000‑mile) arterial corridor that links the capital Istanbul with the Mediterranean coast and the Syrian border, has officially secured a €17 billion financing package, according to a Turkish government source. The funding, provided by the European Union through the European Investment Bank (EIB), is slated to complete the remaining stretches of the highway that have been under construction for more than a decade. The agreement represents a significant milestone in Turkey’s ambitious infrastructure programme, which aims to position the country as a key land‑bridge between Europe, Asia and the Middle East.

What the Southern Anatolian Highway Actually Is

The SAH is part of a broader “Anatolian Highway” network that was launched in 2007 under the leadership of former Prime Minister Recep Tayyip Erdoğan. The idea was to create a modern, high‑speed road system that would cut travel times between Istanbul and the southern provinces, and, crucially, provide a direct, high‑capacity link to the southern border near the Turkish‑Syria frontier. The highway will ultimately facilitate trade and tourism by connecting major cities such as Bursa, Eskişehir, Konya, Adana, Mersin and Antalya.

The completed route will pass through a mix of flat plains and rugged mountain terrain, requiring a combination of viaducts, tunnels and extensive earthworks. The last major obstacle had been the Taurus Mountains segment, a 120‑kilometre (75‑mile) stretch that had faced both engineering and political challenges. The €17 billion financing is earmarked specifically for this difficult section, as well as the construction of several new interchanges, rest‑areas and service centres.

The Financing Deal – How It Was Arranged

According to the source, the deal was negotiated by the Turkish Ministry of Finance in partnership with the EIB, the EU’s policy bank. The €17 billion loan will be disbursed over a 20‑year period at a fixed interest rate of 2.5 %, which is below the EU’s typical benchmark for such projects. The financing is part of a broader EU “InvestEU” framework that has earmarked €20 billion for Turkish infrastructure projects, including the Northern Anatolian Highway, the East‑West railway line and a new port in the eastern Black Sea region.

The EIB’s participation marks the first time the bank has provided such a large loan for a Turkish highway. Earlier this year, the bank signed a €2 billion line of credit for the Istanbul–Ankara high‑speed rail corridor, and has expressed confidence in Turkey’s ability to meet the repayment terms.

The Turkish source noted that the financing agreement also includes a “safety‑net” clause: should Turkey default on its payments, the EU would step in to mitigate losses, a provision that underscores the political importance of the project. “This is a signal to the European Union that Turkey remains a valuable partner for infrastructure development,” the source added.

Political Context and Significance

The SAH is a key element of the Turkey–EU accession talks, which have been stalled since 2016. While the EU has long been reluctant to bring Turkey fully into the Schengen area, infrastructure projects such as the SAH help keep the relationship on a pragmatic footing. By investing billions in Turkey’s transport network, the EU is both supporting Turkish economic growth and securing a more reliable transit route for goods destined for Europe.

The project also has a strategic dimension in the context of the Syrian conflict. Turkey’s southern provinces have borne the brunt of the humanitarian crisis, hosting over 4 million refugees from Syria. A modern highway would streamline the movement of goods and aid, and could help stabilize the region by improving access to markets for Turkish exporters.

Within Turkey, the project is a showcase of the Erdoğan administration’s “infrastructure for peace” narrative. Prime Minister Tayyip Erdogan, speaking at the SAH’s groundbreaking ceremony last year, said: “The Southern Anatolian Highway is not just a road; it is a bridge between cultures, between Europe and the East, and between a nation’s past and its future.”

Project Timeline and Expected Benefits

Construction of the entire SAH has been segmented into four phases. The first phase, covering the Istanbul–Bursa–Eskişehir stretch, was completed in 2023. Phase two, covering the central Anatolian corridor to Adana, wrapped up in early 2024. The current €17 billion financing will fund Phase three, which covers the Taurus Mountains and the final 300 kilometres to the Syrian border.

Once finished, the highway is expected to cut travel time between Istanbul and Adana from 12 hours to about 8 hours. According to the Ministry of Transport, the improved corridor could generate an estimated €6 billion in annual economic activity by boosting trade volumes and reducing transport costs. The Turkish Statistical Institute has projected that the project would create roughly 80,000 direct jobs during the construction phase and an additional 20,000 permanent jobs in logistics, maintenance and ancillary services.

Reactions from Stakeholders

The European Commission’s Director for Turkey, Jean-Pierre Bouchard, praised the deal as “an example of how EU financial instruments can be used to support sustainable development in partner countries.” He noted that the EIB’s financing will be “subject to rigorous environmental and social safeguards, in line with EU standards.”

Turkish business leaders, particularly those in the logistics and manufacturing sectors, have welcomed the project. “The Southern Anatolian Highway is a critical piece of infrastructure for our supply chains,” said Selim Kara, CEO of a large Turkish logistics company. “It will reduce our shipping times dramatically and open up new markets in the Middle East.”

On the other hand, environmental groups have raised concerns about the impact of large roadworks on the Taurus Mountains’ ecosystems. A spokesperson for the Turkish Federation of Environmental Associations warned that “the project must include comprehensive mitigation plans for endangered species and protected habitats.” The Turkish government has indicated that it will carry out environmental impact assessments and that the EIB’s due‑diligence process will include strict environmental clauses.

Looking Ahead

The completion of the Southern Anatolian Highway is likely to become a benchmark for future EU‑Turkey cooperation on infrastructure projects. The EU has signalled plans to consider similar funding for other critical transport corridors, such as the East‑West rail line and the proposed Istanbul Metro Line 6 extension. Meanwhile, the Turkish government has set its sights on completing the “Anatolian Highway” network by 2030, with the goal of integrating Turkey more fully into the European transport ecosystem.

As the project moves into the final construction phase, the EU and Turkey are poised to demonstrate how financial diplomacy can translate into tangible infrastructure gains that benefit both sides of the Bosphorus. The €17 billion financing is not only a financial transaction; it is a symbol of the continuing, albeit complex, partnership between Turkey and the European Union—a partnership that balances economic interests, political ambitions and the realities of a region in flux.