Tapping an inexhaustible resource
The government has therefore launched a number of initiatives to attract investments in the energy sector, not only in the area of conventional power generation, but also with a strong focus on renewable energy (RE). From 34.8% in 2010 the share of RE has increased to 40% in 2014, and developing hydro, wind and solar power continues to be at the top of the agenda. For a long time most investments have been directed towards the hydro and wind sectors. Since 2013, however, promoting photovoltaic (PV) projects has become a priority. Although falling energy production costs have definitely facilitated the shift, attractive rates on the energy markets and Turkey’s virtually year-round insolation are the two key factors fuelling PV investments.
In 2010, barely a year after it was created, the GGF began to build an attractive portfolio of investments in partner institutions (PIs) that support Turkey’s national plan to develop energy efficiency (EE) and renewable energy. The Fund’s latest investment in 2014 was in the form of a EUR 20 million credit line for Aklease, Turkey’s leading machinery and equipment financing company, to get a major grid-connected PV system off the ground.
Green entrepreneurship wins
One of Aklease’s clients is a local real estate company that developed an 8 MW peak solar farm at a total net project cost of USD 12 million. Located in the province of Konya, about three hours by car south of Ankara, the ground-mounted solar project is expected to generate 12.8 GWh per annum – enough to provide electricity for 2,500 households. The region offers a unique combination of advantages: solar radiation is among the highest and most dependable in the country; establishing solar farms does not encroach on arable land resources; and distances between the plant and energy transmission lines can be kept short. Benefitting from a reasonable feed-in tariff, Aklease’s client will supply the electricity to the grid for the first ten years and then be able to sell it freely on the energy market.
The GGF began working closely with Aklease in 2014 and the cooperation has proved very fruitful for both sides. The combination of longer term funding that matches the tenor of the sub-loans with targeted technical assistance enables Aklease to provide much-needed financing and specialized services in the growing RE market – and the GGF to maximize investment impact, outreach and return. It is projects such as Konya that will maintain Turkey on its trajectory towards sustainably improving its energy trade balance.