BAHRAIN: Vision3, an alliance of three major Gulf financial institutions, has signed a landmark deal with Turkey paving the way for nearly $9 billion investment in Turkey’s agricultural sector.
Two Bahraini companies — Gulf Finance House (GFH) and Ithmaar Bank — and UAE’s Abu Dhabi Investment House (ADIH) on Friday signed a memorandum of understanding (MoU) with the Investment Support and Promotion Agency of Turkey (ISPAT) at Dolmabahçe Palace in stanbul.
Turkish officials were quick to portray the deal as a vote of confidence in Turkey’s economy. “We punched through the face of the crisis,” senior executives said referring to the global financial turmoil the world is currently facing. The investment is primarily focused on the agricultural industry in Turkey, particularly the multibillion dollar Southeastern Anatolia Project (GAP), officials said.
Present were ISPAT President Alpaslan Korkmaz, State Minister and Deputy Prime Minister Nazım Ekren, Ithmaar Bank Chairman Khalid Abdulla Janahi, GFH Chairman Esam Janahi and ADIH Managing Director Rashad Janahi.
Starting with an upfront capital payment of $1 billion, the investment plan will allocate $3 billion to the Turkish agricultural sector in 2009. The total capacity of the plan, named AgriCap, is $6 billion and Turkey is the first country to sign a preliminary agreement with it. “It may leverage up to $9 billion and may even go higher if we can bring additional investors along with us,” Khalid Janahi said. He said that there has been much interaction between Turkey and Gulf countries in recent years and those meetings between top officials have paved the way for more investment. Noting that the fund also covers the hospitality, entertainment, tourism and energy sectors, he said they may be interested in deals in these areas as well.
Ekren said his government has decided to make substantial infrastructure investments in agriculture to make investment in the real economy desirable for potential investors.
Stressing that the goal is to make Turkey a country of choice for real investments, he explained that the private sector may capitalize on this infrastructure by investing in organic farming, tourism and sustainable energy. Ekren stressed that the food and commodity market is gaining strategic importance and that Turkey is committed to modernizing its agriculture and raising the living standards of its people. Korkmaz said their new investment strategy is to attract investments to the real economy from funds with an abundance of liquidity. He said these investments will generate employment and enhance agricultural projects like GAP, the East Anatolia Project and the Konya Plains Project, all of which will boost the economy in the region.
Korkmaz added: “We are very proud that such an important first step targeting our agricultural sector — definitely one of our country’s strategic powers — has been taken during such a time of global economic slowdown. This step also translates into a confirmation of the trust placed in our country.” He stressed that ISPAT’S overall aim was to secure value-added investments that will also provide know-how and employment.
Rashad Janahi said: “Turkey has a centuries-old agricultural tradition and is home to some of the most fertile arable land in the world. Given the positive ambition that characterizes AgriCap, together with the depth of agricultural know-how across this great country, there is a vast amount we can achieve in the identification of visionary agriculture initiatives. Turkey has a proud agricultural heritage and a government that appreciates the visionary goals AgriCap has set. We applaud their foresight and look forward to working closely with them in the identification of unique agricultural opportunities.”
