A national financing programme brought three geothermal developers based in the western part of Turkey to talks with the European Bank for Reconstruction and Development, Anadolu Agency’s Energy Terminal reported, quoting Adonai Herrera-Martinez, senior manager in the institution’s energy efficiency and climate change team. He added negotiations with two more firms are expected to start by the end of the first quarter.
EBRD developed Pluto (Private Sector Early Stage Geothermal Development Framework) to finance exploration activities and to provide technical assistance in applying best global practices, hence reducing technical risks at this stage, Herrera-Martinez said. The bank supports renewable energy projects in Turkey through equity and debt financing. “Turkey has huge potential across all renewable energy sources and the EBRD stands ready to support all of them. Geothermal energy presents specific challenges in terms of early stage development, hence the development of Pluto, a dedicated facility to address this technology’s specific barriers,” Herrera-Martinez underlined.
He explained that once Pluto’s funds of USD 125 million (EUR 112.3 million) are fully allocated, EBRD could potentially consider mobilizing additional grant-based funds to be able to look into more projects. He noted that the geothermal sector is expanding in Turkey and the installed capacity has increased sixfold since 2009. “The increase in installed capacity is due to a combination of factors, starting with regulatory improvements which spurred renewable energy investment, followed by better management of risks associated with this technology. EBRD’s newest initiative to promote geothermal energy generation, Pluto, falls within these measures to mitigate risks and accelerate investments, as does the streamlining of the current renewable energy licensing regime – an endeavour in which the bank is currently working together with the Ministry of Energy and Natural Resources,” Herrera-Martinez stated.
He concluded EBRD also intends to maintain its strong interest in renewables this year through direct deals using both equity and debt loans and through partner banks. Last year the bank provided a EUR 180 million loan for Turkey’s largest geothermal power plant, Efeler. Previously, through Turkish commercial banks, it financed geothermal power plants Tuzla, Gümüşköy, Pamukören, Babadere, Alaşehir and Umurlu. At the end of last year, EBRD agreed to take a 20% stake through a capital increase in the renewables arm of Akfen Holding. The investment aims to help the newly created Akfen Renewable Energy to almost triple the size of its renewable portfolio to over 500 MW of installed capacity.
October 25, 2022
