The Rise of Renewable Energy Investments in Turkey: Opportunities for Foreign Investors

 

Turkey is rapidly positioning itself as a leader in renewable energy, with ambitious goals to expand its green energy infrastructure. As of 2024, the country is making substantial investments in solar, wind, hydroelectric, and geothermal energy to reduce its reliance on fossil fuels and bolster energy security. This trend is attracting significant attention from foreign investors, who are keen to enter the Turkish energy market.

For foreign entrepreneurs looking to invest in Turkey’s energy sector, company formation in Turkey provides an attractive gateway. Turkey’s strategic location as a crossroads between Europe and Asia, coupled with favorable government policies for renewable energy investments, makes it an ideal destination for those wanting to capitalize on the green revolution.

This post will explore Turkey’s renewable energy growth, the government’s role in promoting clean energy, and how starting a business in Turkey can allow investors to tap into the country’s rapidly growing renewable energy sector.

 Turkey’s Renewable Energy Ambitions

Turkey has set ambitious renewable energy targets as part of its 2023 Energy Strategy Plan. The goal is to increase the share of renewables in the energy mix to 32%, with plans to further boost this percentage in the coming years. Solar, wind, and hydropower have become key pillars of the country’s energy infrastructure, supported by a host of government incentives designed to attract both domestic and foreign investment.

The Turkish government has introduced feed-in tariffs, tax breaks, and subsidies for renewable energy projects, making company registration in Turkey especially advantageous for investors in the green energy sector. Additionally, the country’s increasing electricity demand presents lucrative opportunities for companies involved in energy production, distribution, and storage.

 Government Incentives for Renewable Energy

The Turkish government has created a favorable business environment for renewable energy investments by implementing several key incentives. Among these are the Renewable Energy Support Mechanism (YEKDEM) and other schemes that offer competitive rates for electricity generated from renewable sources. Foreign investors looking to establish a company in Turkey to focus on renewable energy can benefit from long-term purchase guarantees and access to land allocations for energy projects.

In addition, foreign-owned companies can participate in public tenders for energy projects, allowing them to secure contracts for large-scale solar and wind farms. Furthermore, companies in this sector can enjoy exemption from customs duties and VAT on imported machinery and equipment used for renewable energy production. These incentives, combined with Turkey’s potential for high solar and wind energy yields, make starting a business in Turkey particularly attractive for energy investors.

 Solar Power: A Growing Market

Turkey’s geographical location makes it one of the best countries in Europe for solar energy production. The country has an average of over 2,500 hours of sunshine per year, which provides a solid foundation for solar power projects. Several large-scale solar farms are already operational, with more in the pipeline.

Foreign investors who are keen to establish a foothold in the solar energy market can benefit from Turkey’s increasing demand for clean energy. By setting up a company in Turkey, investors can participate in the growing solar market, supplying solar panels, installing photovoltaic systems, or developing large solar farms for electricity generation.

Wind Power: Harnessing Turkey’s Coastal Potential

In addition to solar power, Turkey has significant potential for wind energy, particularly along its Aegean and Marmara coasts, where wind speeds are optimal for electricity generation. The country’s wind energy capacity has been expanding rapidly, with several large wind farms in operation and more under construction.

Foreign investors interested in wind power can take advantage of company formation in Turkey to engage in the manufacturing of wind turbines, develop wind farm projects, or provide related services such as maintenance and operations. The government’s support for wind energy projects, along with the availability of prime locations for wind farms, ensures that this sector remains highly profitable for foreign entrepreneurs.

 Hydroelectric and Geothermal Energy

Hydroelectric power is currently the largest source of renewable energy in Turkey, with numerous hydroelectric dams in operation across the country. While opportunities for new large-scale hydropower projects may be limited, there is significant potential for smaller-scale hydropower developments, as well as refurbishment and modernization of existing plants.

Geothermal energy is another rapidly expanding sector in Turkey, particularly in the western part of the country, which is rich in geothermal resources. Turkey ranks fourth globally in terms of geothermal energy production, making it an attractive market for foreign investors looking to start a company in Turkey that focuses on renewable energy.

 Navigating the Company Registration Process for Energy Investments

The process of company registration in Turkey for renewable energy businesses is relatively straightforward. Investors must first decide on the business structure, whether it’s a joint-stock company (A.Ş) or a limited liability company (LTD). Next, the company must be registered with the Turkish Trade Registry, and the necessary permits and licenses must be obtained for energy production, distribution, or storage activities.

Foreign entrepreneurs looking to invest in the energy sector should also open a commercial bank account in Turkey to facilitate financial operations and manage the company’s assets. Additionally, energy companies must comply with regulations set by the Energy Market Regulatory Authority (EMRA), which oversees licensing for energy generation and distribution.

For companies planning to hire foreign workers, obtaining a work permit in Turkey is necessary. Fortunately, Turkey’s work permit process is streamlined for companies in strategic sectors such as renewable energy, making it easier for foreign companies to recruit the talent they need.

 Long-Term Prospects for Renewable Energy in Turkey

Looking ahead, Turkey’s renewable energy sector is expected to continue its upward trajectory. With growing demand for clean energy solutions, increased government support, and Turkey’s strategic location, the country is well-positioned to become a leader in renewable energy.

For foreign investors, the opportunities are vast, whether it’s solar, wind, hydroelectric, or geothermal energy. By taking advantage of Turkey’s business-friendly environment and favorable government policies, foreign entrepreneurs can start a business in Turkey and contribute to the global transition towards a greener future.

 Conclusion

Turkey’s renewable energy sector offers a wealth of opportunities for foreign investors. With government incentives, access to prime renewable resources, and a supportive business environment, company formation in Turkey within the renewable energy space can be a highly profitable venture. By investing in solar, wind, hydroelectric, or geothermal energy, foreign entrepreneurs can play a crucial role in Turkey’s transition to a sustainable energy future.