ISTANBUL: Turkey’s sovereign wealth fund has approached international banks including China’s ICBC for a loan, people with knowledge of the matter told Bloomberg, showing its first signs of life after more than a year of inactivity brought on by internal disputes over its strategy and management.

The fund, known by its initials TWF, asked ICBC for a $5 billion (Dh18.3 billion) loan for a period of 10 years, three of the people said, asking not to be named because the request wasn’t public. Himmet Karadag, the fund’s acting chairman, and board member Yigit Bulut, who also serves as an adviser to Turkish President Recep Tayyip Erdogan, met with ICBC Turkey’s Chairman Xu Keen on October 4 in Istanbul to discuss the loan, one of the people said.

The fund was established following last year’s failed coup to safeguard what is estimated to be $200 billion worth of assets and spur large-scale investments that Turkey’s rulers say will transform the nation into one of the world’s elite economies. But internal strife at the fund led to paralysis and eventually saw its first chief executive, banker Mehmet Bostan, lose his job in September. Erdogan promised an overhaul of the organisation and pledged to appoint a new chief after Karadag, who’s also head of the stock exchange, was asked to fill the job temporarily.

Revised plan

The TWF met with another international bank on Thursday to discuss a loan, according to one of the people. The fund has also been in talks with sovereign wealth fund managers in the Middle East including Qatar’s for financing, one of the people said. The fund would use a loan for investments in its assets under management and also prepare for work to be done once its strategy document is approved by the cabinet, the person said.

The plan, which was first submitted to Prime Minister Binali Yildirim’s office in April and has yet to be approved by him, has been significantly revised since then, according to the same person, who didn’t provide additional details. The fund has been a political football, with rival camps battling each other over the strategy it should implement.

“Most of the more credible economic policy officials in Turkey have made their distaste for the sovereign wealth fund concept clear with the distance they have put between them and the project,” Timothy Ash, a strategist at Bluebay Asset Management in London, said in an email on Friday. “This talk of the SWF taking on loans is obviously an effort to kick-start the SWF into life.” The fund’s approach to Middle Eastern and Chinese sources for financing may be indicative of Turkey’s increasing difficulties in its relations with the West, Ash said. The country is currently engulfed in diplomatic crises with both the US, which has suspended visa services from its missions in Turkey, and the EU, which is said to be reassessing accession funds to Turkey amid a growing rift.

Wealth fund chairman Karadag didn’t respond to texts and calls seeking comment. ICBC Turkey also didn’t immediately respond to a request for comment.