Private Sector Renewable Energy and Energy Efficiency Project

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The objective of the Private Sector Renewable Energy and Energy Efficiency Project for Turkey is to help increase privately owned and operated energy production from indigenous renewable sources within the market-based framework of the Turkish electricity market law, enhance energy efficiency, and thereby help reduce greenhouse gas emissions. There are three components to the project, the first being renewable energy. The project will also finance renewable resources (such as geothermal) for heating and cooling purposes. At the request of the Financial Intermediary (FI), the eligibility criteria for hydro projects have been altered to reflect the definition of renewable hydro projects in the renewable energy law, those projects with a reservoir area limited to less than 15 km. Clean Technology Fund (CTF) will finance small hydro, those less than or equal to 10 MW in capacity, in addition to other emerging renewable technologies. The second component is the energy efficiency. The project proposes to cover also energy efficiency investments. Some of the subsectors likely to be borrowers include iron and steel, cement, ceramics, chemicals, and textiles. Finally, the third component is the use of CTF resources. The benefits of the CTF financing will be lower interest rates and significantly longer tenor, which are expected to be large enough to significantly increase the incentive to undertake these projects.