Turkey’s Eastern Anatolia Development Agency has confirmed that developer Akfen Holding is currently building a 30 MW solar PV power plant in the Edremit district of Turkey’s eastern province of Van.
The Eastern Anatolia Development Agency, the aim of which is to foster cooperation between the public and private sectors, said the US$55 million project will comprise two construction phases. The first regards the building of 20 MW of PV and is expected to be completed in September. Construction of the remaining 10 MW will be completed in 2019.
This is very positive news, because Turkey’s licensed projects segment has remained dormant for more than three years. The country tendered a total of 600 MW of licensed projects in 2014 and 2015. Of this, just 15 MW and 13.3 MW were installed in 2017 and 2016, respectively.
Akfen Holding is the owner of another licensed 8 MW solar PV farm commissioned in 2016 by Turkish company, Asunim and German company, Phoenix Solar for Akfen Renewable Energies. The 8 MW PV farm located in the Elazig region was tendered in 2014.
The vast majority of Turkey’s installed solar PV capacity comes via the so-called ‘unlicensed’ segment of the market, which concerns projects up to 1 MW that are not the result of a competitive tender process.
However, the Turkish government has made it clear it doesn’t want to award more permits for unlicensed PV projects. With the vast amount of permits for unlicensed PV projects expiring at the end of 2018, analysts have been looking at other segments of the market, such as the licensed and the rooftop markets, for potential growth.
Financing is key
Akfen has not published any details of the forthcoming 30 MW project yet. The firm is one of Turkey’s leading infrastructure groups and in December 2015, the European Bank for Reconstruction and Development (EBRD) acquired a 20% stake in the renewable energy subsidiary of Akfen Holding.
The Europeam Bank for Reconstruction and Development (EBRD) has financed several of Akfen’s projects, and in April, the bank announced new long-term senior debt financing of up to $55 million to finance the construction of an 85 MW PV portfolio in Turkey, fully owned by Akfen. The portfolio financed by EBRD comprises projects located in the provinces of Konya, Amasya, Tokat, Van and Malatya.
Nevertheless, timing doesn’t help. According to the tender rules, all 600 MW of the licensed projects need to be installed by the end of 2019. Therefore, investors holding PV project licenses need to hurry.
Turkey’s currency though has lost significant value since the beginning of the year, inflation has hit double digits, the country’s national deficit has widened sharply and international rating agencies have downgraded the country’s debt ratings in mass.
Increasingly, international economic analysts are afraid of a crash in the Turkish economy and this situation makes it very hard for investors to secure financing for infrastructure projects both domestically and abroad.