Jeddah-headquartered multilateral financial institution, Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), has approved insurance coverage of EUR135m ($156.96m) against non-performance of sovereign financial obligations (NHSFO) in support of the Kars-Igdir-Aralik-Dilucu (KIAD) high-standard railway project in Turkiye.
The overall deal includes murabaha financing facilities supported by ICIEC for the project.
ICIEC CEO Dr Khalid Youssef Khalfallah said in a statement, "This strategic investment reflects ICIEC’s ongoing commitment to supporting sustainable and high-impact infrastructure in Turkiye and member countries. The KIAD project strengthens regional connectivity, promotes cleaner and more efficient transport solutions, and accelerates trade integration between Asia and Europe. ICIEC’s role enhances lender confidence and expedites the delivery of this transformative project."
The KIAD railway project is a cornerstone of Turkiye’s 12th Development Plan (2024–2028). Spanning 223.9 km from Kars to Dilucu on the Turkish–Azerbaijani border, it provides a direct link to the Kars–Tbilisi–Baku corridor. Featuring five stations serving key areas in Kars and Igdir provinces, the railway forms a vital segment of the Silk Road economic belt, enhancing the middle corridor across the Caspian Sea and establishing a competitive transport route between Asia and Europe.
The project is set to deliver major economic and environmental benefits by shifting freight transport from roads to electrified railways. This move could cut logistics costs by up to 40% by 2030, streamline supply chains, and boost local industries. During peak construction, the project is expected to create around 3,000 jobs and stimulate broader economic activity. Its fully electrified dual-track design will also help Turkiye meet its climate targets, reducing 498,276 tonnes of CO2 equivalent each year and achieving 95% energy efficiency, making it one of the region’s most sustainable transport projects.