Turkey to lose $270m in budget revenues from SWF transfers

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The transfer of stakes that the Turkish government holds in marquee assets including Turkish Airlines and Ziraat Bank to a new sovereign wealth fund will cost the treasury about TRY1bn, or $270m in budget revenue, finance minister Naci Agbal told Reuters.

The transfers endow the fund with billions of dollars in shares in several companies, and an additional $800m credit line previously extended to a defense support fund, the government has said. It had earlier said it hoped the fund, modeled on similar ones in Turkey’s oil-rich neighbors, would swell to $200bn in assets.

Turkey plans to use the fund to get more competitive credit for massive infrastructure projects championed by President Recep Tayyip Erdogan to jump-start a stalled economy. Mr Agbal told Reuters more assets may be brought under the fund, but did not provide details.

The fund is already searching for bankers to help carry out transactions, according to two people familiar with the matter. Critics have questioned the move, which places the wealth fund outside the government’s audit system, while its leadership is composed entirely of people loyal to Mr Erdogan.

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