ANKARA, May 16, 2024¡ªThe Government of T¨¹rkiye, the World Bank, and Turkish development banks, signed today an agreement for a $1 billion program on ¡®. This innovative program will help establish and expand T¨¹rkiye¡¯s market for distributed solar energy and pilot a program for battery storage, in support of the country¡¯s National Energy Plan.
The government aims to significantly scale-up solar energy to 52.9 gigawatts (GW) by 2035 from 9.5 GW in 2022. The target for battery storage is 7.5 GW. With these and other clean energy measures, the government is boosting energy security as an integral part of efforts to decarbonize T¨¹rkiye¡¯s economy by 2053.
The program is innovative for its use of country systems and for building a platform to diversify private financing. The results-based financing program¡ªthe first of its kind in T¨¹rkiye¡ªwill disburse World Bank funds as pre-agreed results are reached and independently verified.
The program will be implemented by T¨¹rkiye¡¯s leading private and public development banks: the state-owned Development and Investment Bank of T¨¹rkiye (T¨¹rkiye Kalk?nma ve Yat?r?m Bankas? [TKYB]); and the privately-owned Industrial Development Bank of T¨¹rkiye (T¨¹rkiye S?nai Kalk?nma Bankas? [TSKB]). Working in parallel, the two banks will develop T¨¹rkiye¡¯s distributed energy market in two stages. First, they will lend directly to private developers of rooftop and ground-mounted solar investments such as for commercial and industrial customers. Second, they will support other local commercial banks or leasing companies to provide similar loans for solar developers. The program will, thus, develop an increasingly diverse market of financing sources to scale-up distributed solar.
¡°T¨¹rkiye has recently committed to one of the most ambitious programs on energy transition seen in emerging market countries. ľ¹ÏÓ°Ôº welcomes the commitment to double renewable energy by 2035 and is delighted to accompany the country in its efforts to achieve energy security, lower energy costs for consumers, and fight climate change with projects like the one we have just signed today,¡± said Humberto Lopez, World Bank Country Director for T¨¹rkiye.
ľ¹ÏÓ°Ôº financing comprises loans of about EUR 600 million (about $657 million) from the International Bank of Reconstruction and Development (IBRD) and $30 million from the Climate Investment Funds' Clean Technology Fund (CTF), and $3 million grant funding from the World Bank¡¯s Energy Sector Management Assistance Program (ESMAP). The program is expected to mobilize $259 million of private capital.
Manuel Berlengiero, the World Bank Lead Energy Specialist for the program stated: ¡°In addition to meeting the rising demand for electricity, the program will accelerate the next phase of market development, establishing a foundation for the evolution to a mature market for distributed solar energy and storage solutions, capable of attracting private investment and ultimately functioning with reduced public or concessional support.¡±
The program is the inaugural component of the World Bank¡¯s Europe and Central Asia Renewable Energy Scale-up (ECARES) Program. This $2 billion, 10-year program will support the development of 15 GW of renewable energy capacity across the region by creating and developing new markets. ECARES will provide a mechanism to share knowledge and replicate success across countries, while allowing them to choose from a wide range of tools and financing solutions. Investing in renewable energy is part of the World Bank¡¯s vision to create a world free of poverty on a livable planet.
