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Turkey and Germany to Cooperate on New Energy Projects
At the end of 2018, Germany and Turkey agreed on closer cooperation in new energy projects. Both countries jointly targeted renewable energy sources, energy storage, and energy efficiency. For this purpose, Turkey and Germany jointly made four bilateral working groups.
In fact, renewable energy has a great impact on Turkish and German economic ties and the relationship between the two countries. In the last 15 years, German companies had invested approximately €25 billion in the Turkish energy sector.[1]
Possibly, already active German companies will be able to get the advantages more easily, but it’s a chance as the energy sector has a high potential for other foreign investors.
Here is a related article that you might be interested in: “Set Up a Company in the Energy Sector in Turkey.”
New Energy Projects in Turkey: The Nation with the High Demand for Energy
As a developed and newly industrialized nation, Turkey has a great demand for energy resources. With the rapid economic development and population growth, the demand for energy in Turkey has increased since 2002.
From then, with the growing economic performance, the need for energy in Turkey increased proportionally. The energy sector has seen an average growth of 5.5% since 2002 and the demand will increase in the upcoming years. To satisfy this increasing need, Turkey planned to use renewable energy resources. Presently, Turkey comes in 5th position both in energy consumption and the electric market in Europe.[2]
With this current growth of energy, by 2023 a minimum of 110GW will be needed. To generate this amount of energy, Turkey uses all-natural and renewable sources for energy production from the last decade. Turkey and Germany’s cooperation on new energy projects is just a step of that.[2]
Investment Opportunities in the Energy Sector in Turkey
To fulfill such high demand, Turkey has opened all public and private investments since 2002. With such a positive approach from the government and private investments attracted to the energy sector, an 85% share of private entities in electricity generation in 2018.[2]
To manage and operate energy markets, including power and gas commodities, The Energy Exchange Istanbul (EXIST) was established in 2013. In 2018, through M&A transaction investors carried out USD 400 million in the energy industry. Still, Turkey is a net energy importer country, so to generate energy, the government created a favorable investment environment that will give strength to the renewable energy sector and new energy projects.
There are various investment models, such as; unlicensed (small-scale), licensed (medium scale), and YEKA (large-scale) models for different kinds of investors, and to encourage investors, there are many lucrative incentive instruments. So, it can really be a good option for foreign investors to invest in renewable energy projects in Turkey. There is already a demand in the market and investors need to capture it.
Easy Opportunities For Foreign Investors
New energy projects are important for Turkey. With government policies, Turkey is aiming to achieve approximately $11 billion of the investment amount in the energy sector for energy efficiency. Recently in February 2020, the World Bank approved an additional fund of $325 million for Turkey’s Renewable Energy Integration Project, but a hefty amount is needed, and foreign investors can easily use this opportunity.[3]
Make sure to get aid from an experienced legal firm in Turkey to handle your legal affairs.
References
- Sengul, E. (2021, June 2). Germany invests €25 billion in Turkish energy sector, employing 15,000. Anadolu Agency. https://www.aa.com.tr/en/energy/energy-diplomacy/germany-invests-25-billion-in-turkish-energy-sector-employing-15-000/32835
- Energy – Invest in Turkey. Presidency of The Republic of Turkey | Investment Office. Retrieved July 11, 2021, from https://www.invest.gov.tr/en/sectors/pages/energy.aspx
- Turkey Renewable Energy Integration Project – Additional Financing. (2020, February 28). World Bank. https://www.worldbank.org/en/news/loans-credits/2020/02/28/turkey-renewable-energy-integration-project—additional-financing
