In recent years renewable energy market development became
primary energy strategy of Turkish government with the intention of
improving energy efficiency and decreasing energy import
dependency. Particularly, solar power seems as fundamental resource
of electricity generation in the near future. In terms of
insolation Turkey possesses high potential among European
countries. However, solar energy efficiency is still very low and
solar power generation is expected to be one of the emerging market
with new foreign investment opportunities in Turkey. In parallel
with these developments Turkish Regulatory Market Authority
("EMRA")has commenced to grant licenses which requires a
long and winding pathway for completion of procedures. License
applications will be considered up to 500MW installed capacity
which has been announced by EMRA.
Necessary Steps for Licensing
In advance of licensing period, applicants must obtain
pre-license which is attainable provided that the requirements can
be met below:
Legal entities which are applicant for electricity generation by
use of solar energy shall be incorporated as joint stock
company or limited liability company.
Besides, all the shares of the company must be registered
Minimum share capital of the company must exceed
5% of total investment amount which is determined
by EMRA with regard to installed capacity
Articles of association must be comply with EPDK regulations
During the pre-license period, companies are not allowed to make
any amendments on shareholding structure.
A letter of bank guarantee shall be obtained in the amount of
TRY 10,000 for each MW.
12 months insolation measurement shall be executed within last 3
Environmental Impact Assessment Decision shall be granted within
90 days of pre-license period.
Proposed site must not be located in Military Forbidden Zones or
Security Zones which is determined by Turkish General Staff.
In case a legal entity is given Renewable Energy Resource
("RER") certificate by EMRA, company is eligible to apply
for state-owned land with the object of benefiting remuneration,
lease and establish servitude rights. Validity of RER certificate
will depend upon generation license period.
In order to apply for generation license, applicants shall meet
additional requirements below:
Share capital shall be augmented from 5% to 20% before license
Additional letter of bank guarantee will be demanded by EMRA.
Letter of bank guarantee amount will be based on installed capacity
of power plant. Minimum letter of bank guarantee will be 6% of
total investment amount.
Share transfers during the license period is subject to EMRA
approval when 10% shares of license holder company is subject of
direct or indirect acquisition. Also, if a control change occurs
without any change in shareholding structure prior approval of EMRA
will be mandatory.
Solar Power Plant Project Financing
Following the solar power generation license applications,
several local banks and funds usually are keenly interested in
bolstering such projects. Strategically, financial institutions
evaluate these projects under small and medium sized
enterprises' ("SMEs") subsidies. Key indicators seems
as annual net revenue and number of the employees which should not
exceed 250 people in total. According to TurSeff, one of the
Turkish energy fund in Turkey, average cost for solar power
projects is 1,300 Euros per kilowatt. Eased financing conditions
are highly expected regarding loan maturity and warrants which will
attract foreign investors to Turkish solar market in Turkey.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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