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International Investments in Turkey in the Energy Sector - Sarper Göksal

According to the United Nations’ Sustainable Development Goals, one of the most visible and pressing concerns that need immediate attention is the issue of universal access to cheap and clean energy. Sustainable Development Goal 7 (SDG 7) is vital. It provides affordable access to modern energy services, increases the global share of renewable energy, and integrates countries into cleaner and modern energy states. Collaborations to achieve the goal of universal access to energy resources are critical since strengthening international cooperation is vital in investment in clean energy and in ending support for fossil fuel-based energy infrastructure. Developing international cooperation by 2030, as part of the United Nations’ SDG 7, is an essential part of facilitating access to renewable energy, energy efficiency, and advanced and cleaner energy technology.

According to the United Nations Economic and Social Council, emerging states cannot improve themselves since they have limited financial resources. Therefore, developing countries must provide international financial assistance in integrating renewable energy. In this sense, Turkey has substantial potential in terms of renewable energy. However, the high cost of obtaining renewable energy types, the difficulty in storing the energy obtained, and the limited renewable energy infrastructure prevent widespread use. In this context, financial aid made to developing countries such as Turkey is essential in facilitating the integration into cleaner and more affordable energy and maximizing the potential and using it most effectively. International cooperation should not be considered financial aid only. The bilateral or multiple relations of countries with international institutions and organizations create energy diplomacy and pave the way for future energy cooperation.

By the Republic of Turkey's Ministry of Foreign Affairs, Turkey has taken technical cooperation as a primary target in energy production. First of all, a "Positive Agenda" was created for the energy cooperation between the European Union and Turkey. Turkey has also decided to utilize nuclear energy in energy production to meet its energy demand and reduce foreign dependency on energy. In addition, the European Union is willing to establish a stable partnership and cooperation with Turkey according to its strategic objectives. Finally, the European Green Deal is one of Turkey's most recent collaborations with the European Union. This energy cooperation between the European Union and Turkey will develop, and a non-carbon-based economy can be built with a "net-zero" plan by 2053. Following the Paris Agreement held in 2015, the European Union determined its roadmap and published the European Green Deal in 2019; this plans to reduce Europe's carbon emissions by 55 percent by 2030. Briefly, the European Green Deal makes it indispensable for states to work together and make a collective effort to reduce net greenhouse gas emissions cooperatively.

As part of the United Nations' Affordable and Clean Energy target, international financial flows that support clean energy research and development and renewable energy production, including hybrid systems, are directed toward developing countries. Turkey has adopted a self-sufficient policy rather than being dependent on foreign sources as a developing country. However, Turkey has regularly received financial aid from 2000 to 2019 and has been a supported country in international cooperation for years, not a supporter. In the twenty years from 2000 to 2019, Turkey received $7.11 billion in financial aid from the United Nations for affordable, sustainable, and modern energy. In addition, Turkey received financial support of 1.32 million euros for 164 projects from the European Union from 2002 to 2006. Between 2007 and 2013, the period was called the IPA I Period, and Turkey continued to be supported by the European Union. Moreover, although there were fluctuations in the financial assistance provided by the European Union to Turkey between the years 2014-2020, Turkey continued to receive external support in the energy sector.

On the other hand, the International Finance Corporation (IFC) invested 1.8 billion dollars in Turkey in 2016 to support the infrastructure required for sustainable energy and increase the quality by creating an environment where energy companies in Turkey can compete. IFC, for example, will enable Akfen Energy, a subsidiary of Akfen Holding, virtually treble its investment in renewable energy generation and leverage Turkey's domestic energy resources for sustainable manufacturing by acquiring a 16.67 percent ownership in Akfen Energy.

To conclude, many international and supranational organizations such as the United Nations and the European Union provided financial assistance to developing countries such as Turkey and fulfilled their duty. At this point, the integration of renewable energy in Turkey's energy transformation depends on implementing the financial aid it has received over the years by creating a good quality policy and planning. One of the essential factors in energy transformation is cost. As an economically fragile and financially limited country, Turkey needs international cooperation and financial support to transition to renewable energy, particularly for energy transformation. However, the financial resources provided are not enough on their own for the transition to renewable energy. The critical point is that Turkey plans to use this financial resource most effectively and efficiently, creating mechanisms to encourage its citizens to use clean energy and invest in renewable energy. Thus, a green, reliable and modern future can be made possible for Turkey.


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