As Turkey’s all-important energy sector expands, the country's policymakers are working to increase energy production, efficiency, and security while simultaneously mitigating the impact of climate change. To achieve these goals, officials have deepened their engagement with the private sector and their cooperation with international institutions such as IFC.
During the last five years, IFC significantly increased its financing of renewable energy projects, investing $2.3 billion in five projects in the power generation sector, reaching 7.9 million customers. IFC has also invested about $700 million in 17 energy efficiency projects. More than half those funds were channeled through commercial banks for on-lending to energy efficiency projects.
These investments include the largest syndication IFC has ever made, $700 million in Enerjisa for the development of one natural-gas fired thermal power plant and 10 hydropower plants, and are already making an impact. Since the inception of this cooperation, power generation in the country has increased by 3,000 megawatts and 7.9 million energy consumers around the country are being provided with improved service.
Industrialization, rapid economic growth, and steady population growth have in recent years combined to transform Turkey’s energy sector. Although this last decade of development has helped increase Turkey’s electricity generation by 80 percent, including a 90 percent increase in renewable energy generation, an average annual increase in demand of close to 7 percent since 1990 has necessitated further efforts to ensure the availability of clean and reliable electricity.
Investments in companies such as Enerjisa and AkEnerji are focusing on renewable sources such as hydropower, while projects such as the TSKB Sustainable project work to improve the global environment through reduced emissions of greenhouse gases and other conventional pollutants.
This coupling of the immediate challenge of energy security with the long-term challenges of climate change mitigation exemplifies the multi-pronged approach of officials in Turkey. By matching its deregulation and privatization efforts with coordinated investments with IFC, officials are able to reduce and spur investment by the private sector.
By focusing these investments on initiatives that simultaneously bolster energy production and mitigate the impacts of climate change, these companies are investing in today and tomorrow. And by doing all of these things, Turkey is fundamentally transforming its energy sector and working to provide clean, reliable, and affordable energy for all.