Turkish banks are providing funding for renewable energy industry including hydro, geothermal, solar and wind stations. The energy industry in Turkey will require an investment of nearly $130 billion until 2010 in order to maintain growth. The energy demand in the country is rising in line with its economic growth. The banks are providing for energy projects through their resource as well as the resources of the World Bank, European Investment Bank, development agencies and banks.
GarantiBank International N.V. has so far provided loans worth $1.5 billion for energy. The bank has also been authorized to find financing for projects worth $500 million.
Isbank has decided to increase the amount of support it has been providing for energy projects due to the rising demand. Although it is easier to obtain loans for hydroelectric plants at present, the wind energy investments in Turkey have also been rising significantly, as per the Isbank officials. Turkey tops among other European countries with its wind energy technical potential, which is estimated to be around 10,000 megawatts.
Isbank has financed 21 renewable energy-based projects to date. The total financing provided by the bank in renewable energy reached nearly $790 million. Considering the projects that are currently undergoing the evaluation process that figure is expected to cross $1 billion.
Turkey needs an investment of $105 billion in electricity only. The total amount of investment required by the entire energy industry until 2020 is $130 billion.
In the last two years, Yapi Kredi has allocated loans worth nearly $1.3 billion for energy projects. The bank provided financing for an installed capacity of 2,500 megawatts, said Mert Guvenen, a member of the Yapi Kredi executive board.
Vakifbank helped realize 15 energy projects worth $324 million by December 2008. Among the bank’s energy projects, renewable energy consists of 65% while co-generation covers 35%. The bank’s project financing department is currently assessing 20 energy projects estimated to be worth around $600 million.
Halkbank is evaluating 21 hydroelectric plant projects that are estimated to be worth a whopping $190 million euros. Ömer Baktir, vice managing director at the state-controlled lender, said that the bank is expecting a decline in foreign energy investments due to the global crisis. However, the financing needs of the companies investing, particularly in renewable energy, will continue to increase. Mergers and acquisitions will also continue in the upcoming period, so banks will continue to see high demand in financing.
The Energy Market Regulatory Agency has begun playing an active role in the industry. The partnerships established between global energy firms and Turkish firms also constitute the source of attraction for the financing of the sector, according to Cem Mengi, vice managing director at Akbank.
Akbank’s corporate banking department has financed 31 energy projects É with an investment volume of $6.4 billion. Akbank provided loans worth $2.1 billion for these projects, he said, adding that the bank is also planning to provide $300 million in loans for a 610-megawatt hydroelectric power plant project.
Denizbank Project Funding Department Manager Ceyda Cetin Erten said that the bank has so far provided $400 million in loans, including project funding as well as corporate loans. The bank currently works together with other banks on two large-scale energy projects worth $1 billion, which are likely to be completed in 2009, Erten said.
The Industrial Development Bank of Turkey’s Vice Managing Director Burak Akguc said that the bank has evaluated 130 projects since 2005, and financed 71 projects with an investment volume of $2.5 billion.