SK Engineering & Construction said Wednesday that next month it will finalize the project-financing deals for building an undersea tunnel in Turkey, which the company said will become the nation’s largest overseas engineering project.

Following the latest $280 million from the state-run Export-Import Bank of Korea early this month, the construction unit of SK Group has secured financial funding worth $960 million from 11 financial institutions in Korea and abroad.

According to the company, the tunnel will connect Europe and Asia with a 5.4 kilometer double storey undersea tunnel in the Bosphorus Straits, Turkey.

The $1.2 billion project, including the construction of neighboring highways, will be the largest engineering plan carried out by Korean builders since the $700 million canal order from Libya in the 1980s.

The company could reduce investment risks of involving financial institutions by securing the Turkish government’s guarantee on the operation costs of the tunnel, while reaching a deal to transfer related debts together with the project completion.

“The company is scheduled to finalize the project financing worth $960 million within July. The construction work, linking Asia and Europe, could start from August,” said a company official.

SK has secured successful funding for other overseas construction projects.

For the construction of coal-powered power plants in Tufanbeyli, Turkey, the company was offered 610 million euros from the Korea Trade Insurance Corporation early this month following funding from some 10 global commercial banks such as BNP Paribas and HSBC.

The project, whose total construction is expected to be worth 1.09 billion euros, aims to build three 150 megawatt power plants in Tufanbeyli, some 350 kilometers southeast of Ankara, the Turkish capital.

SK also plans to sign a financial commitment for the Xepian-Xenamnoy Hydropower Project in southern Laos early next year.

“The company is evolving successfully as a comprehensive developer, which is responsible for financing as well as project development. Despite the gloomy outlook toward the global economy, overseas projects are contributing to the company’s stable growth,” said Im Han-kyu, the company’s project financing head.

By Lee Ji-yoon (jylee@heraldcorp.com)