Aiming to tap Turkey’s significant geothermal energy potential, the European Bank for Reconstruction and Development (EBRD) and the Clean Technology Fund (CTF) are launching a programme to support exploratory drilling investments. The endeavour announced at the 35th Energy Efficiency Forum in Istanbul includes finance and advice to private developers.
Geothermal energy projects face high risks particularly in their initial stages, including high investment costs and in development and limited access to project finance once drilling has confirmed the resource, EBRD said in a press release on its website. The Pluto initiative, worth USD 125 million (EUR 114.55 million), helps minimize the risks, according to the statement. CTF provides EUR 22.91 million.
Pluto is structured in two phases. Phase one will finance geothermal exploration, drawing on the funds provided by the CTF. If it proves successful, EBRD will be available to finance the final stages of the drilling and the construction of the power plant. Pluto is for five new geothermal power plants with a combined capacity of at least 60 MW, generating more than 450 GWh of renewable electricity per year. It will increase the amount of installed geothermal capacity in Turkey by more than 10%.
Turkey has pledged to develop 30% of its total installed capacity from renewable sources by 2023. About 600 MW of geothermal capacity has been installed in the country – equivalent to 13% of the potential. The resources are mostly concentrated in western Anatolia, with significant potential also identified in central and eastern parts of the region.
Adonai Herrera-Martinez, senior manager in the bank’s energy efficiency and climate change team, said: “The EBRD is the first international financial institution to help private geothermal energy developers bridge the equity gap.” Previously, it has financed six geothermal facilities through Turkish commercial banks. It has also financed Efeler, the largest geothermal power plant in Turkey and the second largest in Europe.