World Bank, Türkiye Sign USD 1 Billion Renewable Energy Deal
World Bank and Türkiye Sign Agreement for a USD 1 Billion Renewable Energy Programme
The World Bank and Türkiye have signed an agreement for a USD 1 billion programme that will support efforts to increase the use of renewable energy.
According to a statement from the Bank, the programme is expected to help establish and expand Türkiye’s distributed solar energy market in line with its goal of supporting the National Energy Plan, and to pilot a battery storage programme.
The statement noted that the government aims to raise installed solar capacity from 9.5 gigawatts as of 2022 to 52.9 gigawatts by 2035, and recalled that the target for battery storage capacity is 7.5 gigawatts.
The USD 1 billion programme, which will support efforts to increase the use of renewable energy, will be implemented by Türkiye’s leading public and private sector development banks.
Accordingly, the state-owned Development and Investment Bank of Türkiye (TKYB) and the privately owned Industrial Development Bank of Türkiye (TSKB) will work in parallel to develop Türkiye’s distributed energy market in two phases.
According to the statement, direct financing will first be provided to private sector investors developing rooftop and ground-mounted solar energy systems for commercial and industrial customers. Second, local commercial banks and leasing companies will be supported so that they can provide similar loans to solar energy investors. In this way, the programme will develop an increasingly diverse market of financing sources to expand the use of distributed solar energy.
World Bank Country Director for Türkiye Humberto Lopez said in the statement: “Türkiye has recently taken on one of the most ambitious energy transition programmes seen among emerging market economies. The World Bank welcomes this commitment to doubling renewable energy by 2035, and is pleased to support the country, through projects such as the one we signed today, in its efforts to ensure energy security, lower energy costs for consumers and combat climate change.”
The World Bank’s Senior Energy Specialist responsible for the programme, Manuel Berlengiero, said: “In addition to meeting rising electricity demand, the project will accelerate the next stage of market development by laying the foundations needed for the transition to a mature market that can attract private investment in distributed solar energy and storage solutions and ultimately operate with less public or concessional support.”
The World Bank financing will consist of a EUR 600 million loan (approximately USD 657 million) from the International Bank for Reconstruction and Development (IBRD) and a USD 30 million loan from the Clean Technology Fund (CTF), together with USD 3 million in grant funding from the World Bank’s Energy Sector Management Assistance Program (ESMAP). The programme is also expected to mobilise USD 259 million in private capital.