Sweden supports Turkish high-risk project worth billions – linked to Erdogan and Putinabout: blank
In the spring of 2021, an application for financial support landed on the table of the Swedish authority, the Export Credit Board. The application came directly from the Turkish state and concerns the construction of a high-speed railway between the cities of Gaziantep and the strategically important port city of Mersin.
The Export Credit Board’s, EKN’s, mission is to promote Swedish exports. EKN does this by guaranteeing the security of loans so that whoever finances the loan, often a bank, is protected from losing money if it is not repaid.
EKN has strict guidelines and expressly aims to promote the environment, human rights and to combat corruption.
The authority has assessed that large parts of the Turkish project must be kept secret and describes it as “business sensitive”. When DN requests the documentation, it is not clear which sums are involved. But official figures from the Turkish Ministry of Finance show the extent of Sweden’s guarantee: almost three billion Swedish kronor.
In return, 30 percent of the Swedish guarantee amount is expected to go towards buying Swedish goods and services to build the railway line. The construction company responsible for the construction in Turkey is called REC – and is part of the Rönesans group.
The Rönesans group has multi-billion projects in the construction and oil industry – and was founded in Russia in 1993. Rönesans has been accused of corruption several times before and is today owned by the Turkish businessman Erman Ilicak. He has connections to both Turkish President Recep Tayyip Erdogan and people close to Russian President Vladimir Putin.
President Erdogan’s palace in Ankara was built by the company Rönesans and is said to have cost over SEK 6 billion. The project has been surrounded by allegations of corruption.
Photo: Wikimedia
Among other things, Rönesans built a controversial presidential palace for Erdogan with 1,150 rooms, which was completed in 2014. In connection with the palace construction, large sums have been sent between tax haven companies belonging to Erman Ilicak’s family. The information was revealed last year in the giant leak “Pandora Papers” by the international journalist network ICIJ.
In April this year, the international organization Turkish Democracy Project, which criticizes the regime in Turkey, went out and warned an American construction giant against any involvement with Rönesans in particular.
– The companies that Sweden intends to support are known for corruption and tax evasion in the billions range. It is clearly corruption at the highest level with ties to the kleptocracy in both Turkey and Russia. If our Swedish decision-makers are aware of this, but still choose to turn a blind eye, it is extremely serious, says Louise Brown, anti-corruption expert with a background at Transparency International and the World Bank.
The controversies surrounding the Turkish group are not unknown to the Swedish authorities.
In the documentation from EKN, which DN has taken notice of, the deal is assessed as a high-risk project. On six out of eight points, the risks are judged to be at the highest possible level, including in terms of health and safety, working conditions and biological diversity. The authority writes that the risk of corruption is high in the Turkish public sector and raises the risk regarding the country’s ability to repay the loan.
Russia is Rönesan’s most important market. Close to 40 percent of the revenue comes from there. Among other things, the group has built the headquarters for the Russian gas giant Gazprom.
The group’s owner Erman Ilicak is described in Turkish and international media as a key person in bringing together Russian and Turkish interests.
In 2017, he participated in a summit meeting between Presidents Erdogan and Putin in Moscow where the Russian wealth fund, RDIF, invested in Rönesan’s major project in Russia.
The US Department of the Treasury describes RDIF as Vladimir Putin’s own “slush fund”, i.e. a fund that can be used for corrupt and illegal purposes. After Russia’s war of aggression against Ukraine, RDIF is under broad sanctions from both the US and the EU.
In the Swedish EKN’s decision document regarding the railway project, the authority has addressed the risk that the deal could involve sanctioned actors. But EKN concluded that in this particular transaction there is no specific Russia connection.
The process at EKN has been ongoing at the same time as Russia launched a war of aggression against Ukraine and Sweden applied for membership in NATO.
Turkish President Erdogan has been the most outspoken opponent of Swedish membership, and therefore the Swedish government has conducted intensive negotiations over the summer to get Turkey to approve the application.
On June 6, the Export Credit Board gave the green light to support the railway project.
A month later, Turkey and all other NATO countries signed the accession protocol for Sweden, the first step towards Swedish membership.
If the NATO process had any significance for EKN’s decision, the authority does not want to answer.
EKN’s board, which made the decision, includes representatives from the Ministry of Foreign Affairs and the Ministry of Finance. The decision means that the Turkish construction company has now been approved as a business partner by Sweden. The approval is conditional: among other things, the company must show how it will fulfill various criteria regarding social responsibility and the environment. A quote, which is the next step for Sweden’s guarantee, has not yet been issued by EKN.
Source: https://sweden.postsen.com/news/26466/Sweden-supports-Turkish-high-risk-project-worth-billions-–-linked-to-Erdogan-and-Putin.html