Turkey's leading mobile phone operator Turkcell signed a memorandum of understanding (MoU) for a 500 million euro loan agreement with the China Development Bank (CDB), the company said Friday.

In a statement, Turkcell said the eight-year maturity loan, with a three-year grace period, is planned to finance the procurement of equipment and hardware from Chinese suppliers. The parties are currently working to make the MoU a final agreement.

"We are strengthening our financial structure as Turkcell is ramping up the work on 5G technologies with existing technologies," Turkcell Chief Financial Officer Osman Yılmaz said in the statement. "This long-term and low-cost loan that will enable us to finance our purchases of necessary equipment for the next three years will reinforce Turkcell’s strength to implement its plans," he added.

The company aims to sign the final deal in the first quarter of next year and use the loan to finance its current and upcoming purchases for 5G technologies, the chief financial officer noted.

In March, Turkcell also signed another loan agreement with Chinese Development Bank. The seven-and-a-half-year maturity loan agreement provided Turkcell with a financing package of 235 million euros.

Turkcell has been working on 5G technology development with Ericsson and Huawei for the last couple of years.