INVESTIGATION OF FINANCING METHODS OF URBAN TRANSFORMATION PROJECTS IN TERMS OF SUSTAINABILITY

Abstract

Purpose- In Turkey, despite the support of governmental institutions, a substantial part of the contractor companies that carry out urban transformation activities have experienced financial problems due to uncertainties in the markets, exchange rate changes and raw material price increases, and bankruptcy and concordat situations have arisen. The transformation of most of the risky houses in earthquake zones has not been completed yet. In this study, alternative financing methods that can help contractor companies involved in urban transformation projects to provide sustainable cash flow are analyzed. Methodology- Within the scope of the study, the financing methods applied in urban transformation projects and suggested in the literature were examined and compared. In addition, the potential of these methods to provide financial sustainability in markets with high uncertainty has been examined. Findings- It is seen that the most important reason for the companies to come to the point of bankruptcy are the cost increase related cash flow imbalance. In the same period, the profitability of the financial institutions that financed the projects increased. Conclusion- It has been concluded that urban transformation projects can be successful by financing with the methods that enable financial institutions to become partners in commercial risk when environmental uncertainties are high. Keywords: Financial sustainability, financing methods, urban transformation. JEL Codes: D25, M21, R58