Investment supports Turkey’s shift to renewable energy
In its first direct equity investment in Turkey’s power sector, the European Bank for Reconstruction and Development (EBRD) is acquiring a 20 per cent stake in the renewable energy subsidiary of Akfen Holding, one of the leading infrastructure groups in the country. The US$100 million investment will provide a further boost to Turkey’s renewable energy sector.
Akfen Yenilenebilir Enerji (Akfen Renewable Energy or AkfenRE) will own a portfolio of renewable projects, including operational hydro and solar power plants and several wind, solar and hydro projects under development, with a total operational capacity of 210MW.
The EBRD investment will help AkfenRE to almost triple the size of its renewable portfolio to over 500MW of installed capacity and to become one of the largest producers of renewable energy in Turkey. As a shareholder, the EBRD will nominate a member for the board of AkfenRE and will help further advance the company’s corporate governance and competitiveness.
Nandita Parshad, EBRD Director for Power and Energy Utilities, said: “We are pleased to enter into a strategic partnership with Akfen to scale up the development of renewable sources of energy in Turkey. We already have a strong relationship with Akfen in a number of sectors and look forward to success as partners in the energy sector. Turkey has set itself ambitious targets. We will be part of the solution.”
Süha Güçsav, CEO of Akfen Holding, added: “Energy investments play a key role for our company’s growth and the EBRD funds will be used to strengthen our activities in the area of renewables. We are in the process of developing a balanced portfolio in the medium to long-term with sustainable generation in all segments of the energy sector. To achieve this goal we are planning to continue diversifying by investing in hydro, wind and solar projects. The shareholder agreement with the EBRD is one of the main steps for us in this process.”
Turkey is working to meet growing domestic demand for electricity and the country aims to add 34 GW of hydropower, 20 GW of wind energy, 5 GW of solar energy, 1 GW of biomass and 1 GW of geothermal to its energy mix by 2023.
To help the country achieve its renewable energy targets, the EBRD has invested almost €2.8 billion in sustainable energy projects, including two of the country’s largest wind farms – Bares and Rotor – and the largest geothermal power plant in Turkey, which is also the second largest in Europe, EFELER GPP.
The EBRD is also closely working with the Turkish Ministry of Energy and Natural Resources and has helped develop Turkey’s first National Renewable Energy Action Plan to attract more investment in renewable energy projects. It is currently working on a National Energy Efficiency Action Plan to help Turkish industry become less energy-intensive.
The EBRD is the largest financier of renewable energy and energy efficiency in its region. The Bank has had a strong environmental mandate ever since its inception and has steadily increased its activities to promote the sustainable use of energy and resources. Recently, the EBRD has adopted a target to double the pace of its sustainable energy and resource financing and expects to invest €18 billion over the next 5 years in this field.