Türkiye and the World Bank have signed a deal for a $1 billion program to boost the expansion of renewable energy. The program will help to establish and expand the Turkiye market for distributed solar energy and pilot a program for battery storage, the bank said in a statement.
The financing includes loans of about 600 million euros (about $657 million) from the International Bank of Reconstruction and Development, $30 million from the Clean Technology Fund, and $3 million in grant funding from the World Bank’s Energy Sector Management Assistance Program. The program is also expected to assemble $259 million of private capital.
Moreover the country has published a new law in the Official Gazette on May 11, 2024 ,amending the Electricity Market Law No: 6446 and the Coastal Law No: 3621 . This law introduce new opportunities for the investors in renewable energy, as well as, new prospects for current investors that have been looking for ways to focus their efforts and resources in other areas.
This law also bring new opportunities for certain types of projects. According to the amendments made in the Coastal Law No: 3621,electricity generation plant can now be built in designated zones of seas, lakes (natural and artificial) without the need of a zoning plan.
The world bank said that the Development and Investment Bank of Türkiye (TKYB) and Industrial Development Bank of Türkiye (TSKB) are the ones to implement the program.
For the first of its kind in Türkiye, the results-based financing program will be disbursed from World Bank funds once the pre-agreed results are achieved and verified independently.
Türkiye’s distributed energy market in two phases: Firstly, they will lend directly to private developers for commercial and industrial solar installations, including rooftop and ground-mounted systems. Secondly, they will support other local commercial banks or leasing companies to provide similar loans for solar developers.
“The program will, thus, develop an increasingly diverse market of financing sources to scale up distributed solar,” the bank said.
The country aims to significantly scale up solar energy from 9.5 GW in 2022 to 52.9 gigawatts (GW) by 2035, while the target for battery storage is 7.5 GW.
“The World Bank welcomes the commitment to double renewable energy by 2035 and is delighted to accompany the country in its efforts to achieve energy security, lower energy costs for consumers, and beat climate change with projects like the one we have just signed today,” said Humberto Lopez, World Bank country director for Türkiye.
“In addition to meeting the rising electricity demand, the program will boost the next phase of market development, establishing a foundation for the evolution to a mature market for distributed solar energy and storage solutions capable of attracting private investment and ultimately functioning with reduced public or concessional support,” Manuel Berlengiero, the World Bank lead energy specialist for the program, was quoted as saying in the press release.
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