On May 16th, Türkiye and the World Bank signed an agreement for a $1b program aimed at accelerating the expansion of renewable energy in the country.
This initiative will help establish and grow Türkiye’s distributed solar energy market and launch a pilot program for battery storage, according to a statement from the World Bank.
The financing includes approximately USD $657m in loans from the International Bank for Reconstruction and Development, $30m from the Clean Technology Fund, and $3m in grant funding from the World Bank’s Energy Sector Management Assistance Program.
Additionally, the program is expected to mobilise $259m in private capital.
The Development and Investment Bank of Türkiye (TKYB) and the Industrial Development Bank of Türkiye (TSKB) will implement the program.
This results-based financing program, the first of its kind in Türkiye, will release World Bank funds as pre-agreed results are achieved and independently verified.
The stages
TKYB and TSKB will develop Türkiye’s distributed energy market in two stages. First, they will provide loans directly to private developers for rooftop and ground-mounted solar projects aimed at commercial and industrial customers.
Second, they will support local commercial banks and leasing companies in offering similar loans to solar developers.
The World Bank stated:
“The program will develop an increasingly diverse market of financing sources to scale up distributed solar.”
Türkiye aims to significantly increase its solar energy capacity to 52.9 gigawatts (GW) by 2035, up from 9.5 GW in 2022, with a battery storage target of 7.5 GW.
“The World Bank welcomes Türkiye’s commitment to double its renewable energy capacity by 2035 and is pleased to support the country in its efforts to achieve energy security, reduce energy costs for consumers, and combat climate change,” said Humberto Lopez, World Bank country director for Türkiye.
Manuel Berlengiero, the World Bank lead energy specialist for the program, added, “In addition to meeting the rising electricity demand, the program will accelerate the next phase of market development, laying the foundation for a mature market for distributed solar energy and storage solutions capable of attracting private investment and ultimately operating with reduced public or concessional support.”
