Turkey’s 1 GW Konya project in doubt

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The planned 1 GW solar farm at Konya was meant to be the poster child for Turkish PV.

The license to build the project was auctioned in March 2017 and attracted bids from four consortia who signed up to strict local content requirements which called for Turkish manufacture of PV ingots, wafers, cells and modules.

According to the tender rules, 60% of the first 500 MW slice of the Konya project has to contain locally made components.

As victorious project partners, Korean manufacturer Hanwha Q Cells and Turkish company Kalyon Enerji inaugurated a manufacturing facility in Ankara in December 2017 to much public fanfare, attracting the country’s then prime and energy ministers to the ceremony.

In the last month though, Turkey’s solar sector has been publicly discussing a rumored ‘divorce’ of the partners, with the Turkish press reporting an inability to secure financing has put the consortium in doubt. Hanwha and Kalyon were expected to invest $1.3 billion into the 1 GW showpiece project.

A legal conundrum

A spokesperson for the South Korean company told pv magazine “nothing has been determined” yet, however our sources have told us Kalyon Enerji is searching for another project partner to again try to secure financing.

Two major challenges remain. The first is that the lack of financing is due not to Hanwha Q Cells’ bottom line but to the state of the Turkish economy. Several Turkish energy companies are struggling to repay loans due to costs associated with the exchange rate of the Turkish lira.

The second challenge is legal. The consortium that won the Konya bid is tied to tender rules and a termination of the partnership needs to be legally permissible. Under the current rules, it is not possible to sell shares in a tendered project to a third party before the project is complete.

In a bid to salvage Konya, the Turkish government is preparing to change the rules for PV projects and will apply the revised guidelines retrospectively. The new rules are expected to be published in the country’s official gazette imminently.

The difficulty encountered by Hanwha and Kalyon in raising the finance needed to establish domestic manufacturing at the scale needed may also prompt the Turkish authorities to rethink the local content requirement of its domestic PV program.