Scaling-up Distributed Solar PVs in Turkey, Program for Results (PforR)

Start & End Date: 2021-Ongoing

Country/Countries: Turkey

Multilateral Institution(s) Involved: Asian Infrastructure Investment Bank, World Bank

Increasing energy demand driven by Turkey’s growing economy constitutes a macroeconomic challenge and an energy security risk. The primary energy consumption in Turkey more than doubled over the past two decades to fuel the economic growth, and is projected to increase 50 percent over the next two decades. A large portion of its energy demand (up to 75%) depends on import (99% of gas and 93% of oils are being imported) and its energy imports accounted for almost 20 percent of Turkey’s total imports in 2018, contributing to massive current account deficits (US$27.2 billion in 2018). Recognizing the energy security risk, Turkey’s energy reforms have prioritized several measures to meet energy needs with a fast-growing economy since early 2000’s. Those reforms have resulted to several strategic documents on renewable energy (RE) and energy efficiency as well as introduced legislations, and regulations to support this agenda. Solar power has emerged as a promising long-term option for meeting growing energy demand in Turkey while addressing the adverse environmental impacts of conventional fuels.

The Program aims to help the Government of Turkey (GoT) to achieve its renewable energy targets by unlocking the underdeveloped potential of the distributed solar photovoltaic (PV) market. It will support investments in the installation of distributed solar PV systems (DSPV) and battery energy storage systems (BESS) in industrial, commercial, public, and residential buildings. The Program will develop innovative financing models and products tailored to solar PV investments for small and medium-scale consumers. The proposed PforR is being developed by the World Bank (WB) and the GoT to contribute to achieving the country's solar PV capacity targets. WB and AIIB will provide sovereign-backed financing to Türkiye Sinai Kalkinma Bankası A.Ş. (TSKB) and Türkiye Kalkınma ve Yatırım Bankası A.Ş. (TKYB).

Expected results of the Program include: (i) Scaled up DSPV and BESS; (ii) Improved policy and regulatory framework for DSPV and BESS; and (iii) Green financing mainstreamed in the Borrowers and innovative business models piloted Overall, it is anticipated that the PforR Program will have positive environmental and social impacts, such as reducing local pollutants and greenhouse gases emissions and improved access to renewable energy sources.