EBRD continues support for renewables in Turkey with EUR 400 million funding

The EBRD has announced a new €400 million financing package for small-scale renewable energy and resource efficiency projects in Turkey.

The new funds will be allocated to the EBRD’s TurSEFF facility, which until now has been working as a credit line to Turkish banks for on-lending to small and medium-sized enterprises (SMEs) that wish to invest in renewable energy and/or energy efficiency projects.

The new financing “builds on the success of the first two phases of the facility, with €600 million already provided by the EBRD, the European Investment Bank and the Japan Bank for International Cooperation to Turkish partner banks,” wrote an EBRD press release.

However, one substantial change is that the new extension of financing “will include, for the first time, leasing companies in addition to banks and will also be available for municipal projects,” added the EBRD. As a result, TurSEFF is now evolving from its initial focus on SMEs, to begin targeting the corporate and commercial sectors, leasing companies and municipal clients, said Terry McCallion, EBRD Director for Energy Efficiency and Climate Change.

The European Union is also supporting the TurSEFF program with funding for technical assistance, which will enable experts to advise TurSEFF’s partners (e.g. banks, private companies, municipal service providers and others).

Vakifbank is the first bank to receive funds under the newly announced phase of TurSEFF.

Solar PV boost

The EBRD had previously told pv magazine that a large portion of the TurSEFF funding will go towards the development of solar PV systems. In fact, as of February 2016, the TurSEFF facility had financed 45 MW out of the total 300 MW of installed solar PV operating in Turkey at the time, while another 104 MW financed by TurSEFF was under construction, Andi Aranitasi, an Istanbul-based senior member of the Power and Energy team at the EBRD told pv magazine.

The EBRD has been instrumental in creating the necessary investment environment for the solar PV sector to develop in Turkey. Turkey’s solar PV development would not have been able to flourish without the EBRD’s contact support, which has taken various other forms, outside of the TurSEFF program.

The EBRD has also supported the Mid-size Sustainable Energy Financing Facility (MidSEFF) and the Turkey Residential Energy Efficiency Financing Facility (TuREEFF) which, among other activities, support large-scale and residential solar PV projects respectively.

Furthermore, in December 2015, the EBRD acquired a 20% stake in the renewable energy subsidiary of Akfen Holding.

And maybe most crucially, Turkey’s National Renewable Energy Plan (NREAP) has been developed with guidance and expertise from the EBRD, and the bank is currently supporting Turkey’s government in addressing some of the key measures suggested under the NREAP roadmap.

EBRD’s announcement of the new €400 million funding package comes at a critical time, as Turkey’s national currency has deteriorated, while its economy has slowed down significantly, leading domestic financing institutions stranded. Unfortunately, the EBRD’s help is not matched by efforts from the Turkish government, which seem to be wasted in tenders and projects that might never materialize.