Turkey imports 75 per cent of its energy needs and the country’s consumption of energy is forecast to double in the next 10 years. With increasing industrialisation, urbanisation and growing concerns over rapidly rising greenhouse emissions, Turkey’s already energy-intensive economy presents one of the greatest challenges and opportunities for sustainable energy investments in the region.
The need for action is urgent. This is why sustainable energy is a key focus of both the Turkish government and the EBRD’s activities in the country. Since the Bank started operations in the country in 2009, it has invested over €1 billion – nearly 44 per cent of its investment portfolio in Turkey – in sustainable energy. About 66 per cent of the investments are in providing financing for sustainable energy credit lines, 16 per cent in renewable energy, 13 per cent in municipal infrastructure energy efficiency, 4 per cent in industrial energy efficiency and 1 per cent in clean energy production.
“The EBRD invests heavily in sustainable energy projects and we do it for a very good business reason as well as trying to do better by the planet. Such investments reduce energy costs by being more energy efficient, helping profits and competitiveness, and assisting industry and economies to grow as well,” says Sir Suma Chakrabarti, the EBRD President.
Small and big businesses benefit
A key financing instrument, worth US$ 280 million, is the EBRD’s Turkey Sustainable Energy Financing Facility (TurSEFF). The Facility on-lends to businesses and households via five local commercial partner banks. TurSEFF benefits from US$ 50 million in concessional and grant co-financing through the Clean Technology Fund (CTF), and a further US$ 7.5 million in funding from the European Union. The funds are used to support the participating banks in developing energy efficiency financing instruments, to help sub-borrowers design and implement such projects, as well as to increase the awareness of the benefits of sustainable energy investments.
One factory in the city of Çorlu in north-western Turkey is reaping the benefits of the EBRD’s sustainable energy financing. ODE Yalitim manufactures insulation materials for the domestic and international market. As well as helping others to cut their energy consumption, ODE Yalitim has also been working to slash its own energy costs. It has received financing from the EBRD to purchase equipment that allows the company to use less energy while maintaining production levels. This also means fewer pollutants are released into the atmosphere.
It is not just big businesses which benefit from the EBRD funding. In Turkey’s largest city, Istanbul, ODE Yalitim is also using EBRD financing to improve the energy efficiency of households. The funds allow the company to pay for insulation work to be carried out.
One homeowner who benefited is Aygün Kayikal. The 22-year old building where she lives had external insulation installed in 2011. She has paid back the cost of the work in interest-free instalments – using savings her family achieved through lower energy bills.
“Now my flat is warmer during winter and our heating bill has decreased by about 50 per cent. Another advantage is that the flat is much cooler during summer,” says Ms Kayikal.
Around 30,000 families across Turkey have reduced their energy bills by an average of 40 per cent through this scheme – saving money and improving their living conditions.
In response to the market demand for renewable energy financing, the EBRD also developed the Mid-Size Sustainable Energy Financing Facility (MidSEFF). This Facility, worth €1 billion (€700 million from the EBRD and €300 million from the European Investment Bank), aims at promoting mid-size (€10-€50 million) renewable energy and corporate and municipal infrastructure energy efficiency projects. MidSEFF is also working to develop the carbon markets in Turkey and harmonise the environmental and social standards of sustainable energy projects with those applied in the European Union. MidSEFF too provides technical assistance to both local banks and project sponsors for the development of these projects. This technical assistance is funded by the European Union.
One project that benefited from the EBRD’s MidSEFF financing is Gümüşkӧy Geothermal Power Plant in Aydın province, in Turkey’s western Anatolia region. The 13 MW geothermal power plant will become operational in July 2013, and will generate 85 GWh/yr of clean baseload energy per year, saving more than 50,000 tonnes per year of CO2 emissions into the atmosphere.
Since 2006, the EBRD has invested nearly €10 billion in 552 sustainable energy projects in 31 countries, with a total project value of €55 billion. The total reduction in carbon emissions achieved by these projects is estimated at approximately 50 million tonnes a year.
Turkey imports 75% of its #energy needs: with support they are turning that around http://t.co/bsrEYkg2 @EBRD @SGenergyforall
Promoting Turkey’s green growth #EBRD #CIFForum: http://t.co/bxMdO064