Answer ... The Environmental Law (2872) is the main statute that regulates the environment in Turkey. The Environmental Law and its secondary legislation set out rules and procedures in relation to:
- waste management and decontamination;
- pollution prohibition;
- environmental impact assessments;
- environmental licences and permits;
- hazardous chemicals; and
- other waste.
Any breach of environmental law is subject to significant sanctions under the legislation. The polluter pays principle also has a general application.
Turkey is a party to the major conventions on environmental protection, such as:
- the Kyoko Protocol;
- the United Nations Framework Convention on Climate Change; and
- the Paris Agreement.
In order to align the local legislation and practices with the requirements of these conventions, Turkey has implemented an action plan and strategy. In line with these, Turkey is developing a local carbon trading scheme, which is expected to come into force soon.
The environmental regime has a significant impact on projects and project companies. The most relevant regulations in terms of project financings are:
- the Environmental Impact Assessment Regulation; and
- the Environmental Permits and Licences Regulation.
As per the Environmental Permits and Licences Regulation, entities must obtain licences or permits, depending on the polluting impact of their activities, before commencing such activities. The main permit is the integrated environmental permit, which covers air, noise, wastewater and deep-water emissions. There are also single permits available for other emissions.
As per the Environmental Impact Assessment Regulation, any entity which might cause environmental issues due to its activities (eg, hydropower plants with a generation capacity above 10 megawatts, nuclear power plants, thermal power plants with a heating power above 200 megawatts thermal, motorways and public highways) must undergo an environmental impact assessment before the Ministry of Environment and Urbanisation. Upon conducting such an assessment, the Ministry of Environment and Urbanisation must issue a resolution stating either that an impact assessment is not required or that the impact assessment is positive. In the absence of such a resolution, a project cannot commence operations and cannot obtain any other required authorisations, such as construction permits or licences.
In Turkey, projects that are subject to project financing are commonly subject to the environmental impact assessment process and environmental permits and licences. Therefore, the project financing documents will include the procurement of Ministry of Environment and Urbanisation resolutions and environmental permits and licences as conditions precedent to loan utilisation. In addition, the financing documents commonly contain borrowers’ ongoing representations and undertakings regarding compliance with the environmental rules and regulations during the life of the loan, with breach triggering the event of default and acceleration.