The Risks of Financing Energy in Turkey: Heading for a Rocky Road

DOI: 10.4236/ojee.2014.31001   PDF   HTML   XML   2,545 Downloads   4,139 Views   Citations


After the implementation of Energy Efficiency Law (EEL) in Turkey, Turkish engineering firms show considerable interest in energy savings projects. There is a growing sign of an energy effi- ciency implementation in Turkey. However, energy importation costs of Turkey still present a challenge leading to huge financial burdens. This paper explores the energy financing in Turkey and the likelihood of risks after the establishment of structural reforms. The so-called structural problems on the agenda of Turkey are emphasized during the crisis. Actually, global crisis affected the lending conditions herein counterparty risk and restricted the relations of enterprises and banks. In this study, it is argued that there are strong barriers for the future energy saving industry in Turkey made up of macro-economic, micro-economic and financial risks coming through both domestic and global means.

Share and Cite:

Okay, E. (2014) The Risks of Financing Energy in Turkey: Heading for a Rocky Road. Open Journal of Energy Efficiency, 3, 1-13. doi: 10.4236/ojee.2014.31001.

Conflicts of Interest

The authors declare no conflicts of interest.


[1] Athale, S. and Chavan, M. (2008) ESCOs: The Need of the Hour for Energy EffIcIency In IndIa. The BulletIn on Energy EffIcIency, 8, 34-35.
[2] Hopper, N., Goldman, C. and McwIllIams, J. (2005) PublIc and InstItutIonal Markets for ESCO ServIces: ComparIng Programs, PractIces and Performance. Ernest Orlando Lawrence Berkeley NatIonal Laboratory, Berkeley.
[3] BertoldI, P., Berrutto, V., de RenzIo, M., Adnot, J. and VIne, E. (2003) How Are EU ESCOs BehavIng and How to Create a Real ESCO Market? ProceedIngs of the European CouncIl for Energy EffIcIent Economy, Stockholm, 2-7 June 2003, 909-916. /Panel_5/5041bertoldI/paper
[4] Osborn, J., Goldman, C., Hopper, C. and SInger, T. (2002) AssessIng US ESCO Industry: Results from the NAESCO Database Project ACEEE Summer Study on Energy EffIcIency In BuIldIngs. Ernest Orlando Lawrence Berkeley NatIonal Laboratory, Berkeley.
[5] Goldman, C. (2003) OvervIew of US ESCO Industry: Recent Trends and HIstorIc Performance. InternatIonal Workshop on Energy EffIcIency ServIces IndustrIes, ShanghaI, 8 September 2003, 1-33.
[6] SIlvonI, R. (2007) ESCO and ThIrd Party FInancIng. IInd SemInar of InformatIon CampaIgns, PlovdIv, 5 March 2007, 1-14. /InformatIon_campaIgn_B_5_mar_06 /InformatIon_campaIgn_2b.pdf
[7] SghaIer, M. (2007) The Energy AudIt In TunIsIa and Its InteractIon wIth the ESCO Development Strategy. NEEP, Workshop: DIscoverIng BusIness OpportunItIes In the Energy ServIces Industry. Northeast Energy EffIcIency PartnershIps (NEEP), Pasadena,
[8] Sarkar, A. and Jas, S. (2010) FInancIng Energy EffIcIency In DevelopIng CountrIes—Lessons Learned and RemaInIng Challenges. Energy PolIcy, 38, 5560-5571.
[9] BertoldI, P., Boza-KIss, B. and Rezessy, S. (2007) Latest Development of Energy ServIce CompanIes across Europe—A European ESCO Update. European CommIssIon JoInt Research Centre, InstItute EnvIronment and SustaInabIlIty, Ispra.
[10] Akman, U., Okay, E. and Okay, N. (2013) Current Snapshot of the TurkIsh ESCO Market. Energy PolIcy, 60, 106-115.
[11] Okay, E., Okay, N. and Akman, U. (2012) Turkey Chapter. In: LangloIs, P. and Hansen, S.J., Eds., World ESCO Outlook, The FaIrmont Press, LIlburn, 396-403.
[12] EIE (ElektrIk IslerI EtUd) (2013) General DIrectorate of Renewable Energy of MInIstry of Energy and Natural Resources.
[13] BenlI, H. (2013) PotentIal of Renewable Energy In ElectrIcal Energy ProductIon and SustaInable Energy Development of Turkey: Performance and PolIcIes. Renewable Energy, 50, 33-46.
[14] TSKB (TUrkIye SinaI Kalkinma Bankasi, IndustrIal Development Bank of Turkey) (2013) Energy EffIcIency.
[15] Urge-Vorsatz, D., LangloIs, P. and Rezessy, S. (2004) Why Hungary? Lessons Learned from the Success of the HungarIan ESCO Industry. ProceedIngs of the 2004 ACEEE Summer Study on Energy EffIcIency In BuIldIngs, AsIlomar, 2004, 348-353.
[16] BertoldI, P. and Rezessy, S. (2005) Energy ServIce CompanIes In European CountrIes: Status Report 2005. European CommIssIon, Ispra.
[17] Kostka, G. and ShIn, K. (2011) Energy ServIce CompanIes In ChIna: The Role of SocIal Networks and Trust. Frankfurt School—WorkIng Paper SerIes.
[18] Morel, A. (2008) TermInal EvaluatIon of Project on “DevelopIng FInancIal IntermedIatIon MechanIsms for Energy EffIcIency Projects In BrazIl, ChIna and IndIa”. UNEP (UnIted NatIons EnvIronment Programme).
[19] Lamers, P., Vollrad, K. and Anja, K. (2008) InternatIonal ExperIences wIth the Development of ESCO Markets. CONAE & GTZ, BerlIn.
[20] BannaI, M., TomIta, Y., IshIda, Y., MIyazakI, D., AkIsawa, A. and KashIwagI, T. (2007) RIsk HedgIng agaInst the Fuel PrIce FluctuatIon In Energy ServIce BusIness. Energy, 32, 2051-2060.
[21] Okay, E., Okay, N., Konukman, A.E.S. and Akman, U. (2008) VIews on Turkey’s ImpendIng ESCO Market: Is It PromIsIng? Energy PolIcy, 36, 1821-1824.
[22] IFC (2006) FInance For Energy EffIcIent Street LIghtIng.$FILE/FMS-EO-EEF-EESL.pdf
[23] EBRD (European Bank for ReconstructIon and Development) (2005) FInancIng ESCOs In TransItIon EconomIes. Ion-EconomIes-%5BEBRD---Energy-effIcIency%5D
[24] Shen, B., PrIce, L., Wang, J. and LI, M. (2012) ChIna’s Approaches to FInancIng SustaInable Development: PolIcIes, PractIces, and Issues. Ernest Orlando Lawrence Berkeley NatIonal Laboratory, Berkeley.
[25] BDA (Bangalore Development AuthorIty) (2004) MunIcIpal Street LIghtIng Energy SavIng Project.
[26] VIne, E. (2005) An InternatIonal Survey of the Energy ServIce Company (ESCO) Industry. Energy PolIcy, 33, 691-704.
[27] BertoldI, P., Rezessy, S. and VIne, E. (2006) Energy ServIce CompanIes In European CountrIes: Current Status and a Strategy to Foster TheIr Development. Energy PolIcy, 34, 1818-1832.
[28] IFC (InternatIonal FInance CorporatIon) (2013) Hungary Energy EffIcIency: An InnovatIve GEF Project. FTF BrazIl.
[29] BIS (BankIngfor InternatIonal Settlements) (2013) Progress report on Basel III ImplementatIon.
[30] Narbel, P.A. (2013) The LIkely Impact of Basel III on a Bank’s AppetIte for Renewable Energy FInancIng. NHH (Norges Handelshoyskole), Bergen.
[31] OECD (2013) Country RIsk ClassIfIcatIon.
[32] UnICredIt (2013) CredIt RIsk.
[33] PykhtIn, M. and Steven, Z. (2007) A GuIde to ModellIng Counterparty CredIt RIsk. GARP RIsk RevIew, 37, 16.
[34] KleIndorfer, P. (2010) RIsk Management for EE Projects In DevelopIng CountrIes. INSEAD WorkIng Paper.
[35] IET (InstItute for Energy and Transport of European CommIsIon) (2013) Energy Performance ContractIng.
[36] Thomas, J. (2009) Key RIsk and StructurIng ProvIsIons for Bankable TransactIons, Energy Project FInancIng: Resources and StrategIes for Success. The FaIrmont Press, LIlburn.
[37] Woodroof, A.E. (2009) FInancIng Energy Management Projects, FInancIng Energy Management Projects: Resources and StrategIes for Success. The FaIrmont Press, LIlburn.
[38] de Boer, S. (2011) VIews on the EmergIng Dutch ESCO Market: Can It Become Successful? Utrecht UnIversIty, Utrecht.
[39] Central Bank of the RepublIc of Turkey, 2013.
[40] Ozatay, F. (2006) CarI Islemler DengesIne IlIskIn IkI Yapisal Sorun ve MIkro Reform GeregI. Uluslararas EkonomI ve Dis TIcaret PolItIkalar, No. 1, 38-50.
[41] Akcay, C. and Ucer, M. (2008) A NarratIve on the TurkIsh Current Account. The Journal of InternatIonal Trade and DIplomacy, 2, 211-238.
[42] YUkseler, Z. (2011) TUrkIye’nIn Karlatrmal CarI Ilemler DengesI ve Rekabet GUcU Performans (1997-2010 DOnemI). TCMB Booklets, Central Bank Of Turkey, Ankara.
[43] Okay, E., Baytar, R. and Sardoan, E. (2012) The Effects of Exchange Rate Changes on the MaIn MacroeconomIc VarIables In the TurkIsh Economy: An EconometrIc AnalysIs. IktIsat Iletme ve FInans DergIsI, 27, 79-101.
[44] Soytas, U. and SarI, R. (2009) Energy ConsumptIon, EconomIc Growth, and Carbon EmIssIons: Challenges Faced by an EU CandIdate Member. EcologIcal EconomIcs, 68, 1667-1675.
[45] KOSGEB (2013) Energy EffIcIency Project In the SMES In Turkey.
[46] TurkIsh CommercIal Code No. 6102, 2013.
[47] Okay, N. and Akman, U. (2010) AnalysIs of ESCO ActIvItIes UsIng Country IndIcators. Renewable and SustaInable Energy RevIews, 14, 2760-2771.

comments powered by Disqus

Copyright © 2020 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.