THE ISRAELI parliament has approved a financing package for the Israel Aircraft Industries (IAI) McDonnell Douglas F-4 Phantom upgrade programme for Turkey in an attempt to advance the stalled deal.

Work on the first two aircraft is scheduled to begin in July. The parliament has approved state guarantees for the loans, which a group of Israeli banks is to give the Turkish Government to allow the programme to go ahead.

When IAI was selected for the upgrade programme, it was on the premise that a favourable financing package would be made available by Israel. Putting this together has proved more difficult than anticipated, with Israeli banks unwilling to accept the risk.

The Israeli Knesset finance committee has now approved a $410 million guarantee for the $600 million loan, which the banks will provide. The final loan agreement is to be worked out between the Turkish authorities and the Israeli banks.

IAI won the contract to upgrade 54 F-4s in August 1995. The framework agreement for the work was signed after more than five years of negotiations.

Source: Flight International