Turkey Receives Financing for Renewable Energy Integration Project
May 9, 2014
ANKARA, May 9, 2014 – The World Bank Group’s Board of Executive Directors today approved financing of US$300 million from the International Bank for Reconstruction and Development (IBRD) and US$50 million from the Clean Technology Fund (CTF) for Turkey’s Renewable Energy Integration Project. The project will be implemented by TEIAS, the Turkish electricity transmission company, with a guarantee from the Turkish Treasury.
The project’s main development objective is to assist the country in meeting its increasing power demand by strengthening the transmission system and facilitating large-scale renewable energy generation. From the global environmental point of view, the project aims to avoid greenhouse gas (GHG) emissions from fossil fuel-based power through the greater integration of renewable energy source-based generation in Turkey.
The project components are expected to help alleviate the key barriers that inhibit faster development of wind energy in Turkey:
- Component 1 supports the expansion of transmission infrastructure to facilitate faster development of wind power plants in the provinces of İzmir, Çanakkale, and Kırklareli. These three provinces constitute nearly 70 percent of the installed wind capacity in Turkey, and, due to their high wind potential, will continue to attract more wind power invetsments.
- Component 2 supports smart-grid investments to strengthen grid operation and management, which will enable TEIAS to handle the increasing amounts of wind energy.
- Component 3 supports the second Lapseki-Sütlüce submarine power cable which will connect the Anatolian side and Thrace side of Turkey, with a capacity of 2GW. As a result of this sub-component, the 380kV bulk-transmission network to Istanbul across the Bosphorus and Dardanelles straits will form a secure strong loop network around the Marmara Sea.
- Component 4 supports the strengthening of transmission networks to cater to growing demand and supply of electricity in Turkey. This component includes the Yeni Ambarli-Yenibosna single-circuit underground cabling among other investments.
The US$50 million funding from the CTF would be utilized towards components 1 and 2 of the project, which contribute directly to the accelerated expansion of wind energy in Turkey.
The Renewable Energy Integration Project complements previous investments by the World Bank Group to tap Turkey’s significant renewable energy potential from hydro, wind, solar, biomass, geothermal, and other resources.
“Turkey has considerable renewable energy potential. However, substantial public and private investment is needed to fully exploit this resource,” said Martin Raiser, World Bank Country Director for Turkey. “As the World Bank, we have supported Turkey’s energy sector reforms for over a decade, with the objective of making Turkey’s energy sector cleaner, more secure, and less dependent on imports. This project is another important step in this direction.”
The Renewable Energy Integration Project consists of:
- An IBRD Loan (Euro 217.6 M or US$300 million equivalent), with variable spread, 18-year repayment period, 5-year grace period, repayments linked to commitments, level repayment of principal, front-end fee financed from the Borrower’s own resources, and all conversion options.
- A CTF Loan (US$50 million), with a 20-year repayment period, 10-year grace period, and management fee financed from the Borrower’s own resources.
- World Bank Group ready to provide financial support worth $15-18 billion over the next three years
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