Investment in Turkey
Country Report
“The Biggest Buying Motivation is the Growth in New Geographies”
Vensol Investment & Financial Advisory provides services to help international companies find a place in the Turkish market to build a better financial future. Market reform and energy security continue to direct Turkish energy policy. In the last 20 years, the Turkish economy has strengthened its energy investments with the increasing energy demand due to rapid economic and population growth. The country’s net oil and gas import dependency has been effective in creating new investment models to enable renewable energy sources. Import dependency has an important role in energy strategy and policies.
With a growth of 5.5% since 2002, Turkey ranks 5th among European countries in energy consumption, as the country with the fastest growth rate among OECD countries. The double increase in energy supply also has affected the electricity infrastructure along with Turkey’s growing economy.
*Turkey ranks 5th in European Electricity Market.
*Also, it ranks 4th in gas consumption in Europe and in global geothermal power generation capacity.
Turkey has embarked on the path of “energy system restructuring” in order to rationalize the increase in energy demand, reduce energy prices and slow down the growth rate of imports.
- Private and Foreign Investment
- Modernization and Liberalization
- Domestic Production Capacity
Turkey has made almost all of its new investments in 2020 based on renewable energy. Turkey is particularly, suitable for dams that generate hydropower in particular. The country has already begun the construction of the first hydropower plants in the 20th century.
“Renewable Energy” is Prominent Among Investments
Turkey has also greatly increased its share in solar and wind energy and paved the way for the dissemination of renewable energy technologies. Turkey has significantly diversified in its energy mix in the last ten years and its renewable electricity generation has tripled.
The operation of the first nuclear power plant in 2023 will diversify the energy mix. Within the scope of the Eleventh Development Plan (2019-2023), it has been succeeded that in surpassing the targets by providing 38% of its electricity production from renewable resources.
Investment decisions were suspended due to the difficulties caused by the pandemic crisis. The solar energy hot water systems market has achieved high sales momentum in Turkey. However, the continued development of the construction sector and high demand from property owners investing in infrastructure improvements have kept the decline in investment activity below expectations.
When the M&A transactions of Turkish companies abroad are analyzed, the objectives of developing “know-how”, opening up to new markets for production and export, and creating a global-scale competitive environment come to the fore. During the 2020 Pandemic, strategic growth plans played an effective role in the companies’ realization of M&A investments abroad. It has been analyzed that Turkish companies, which have made acquisitions and mergers in different geographies, have largely acquired completely or most of them.
Vensol Investment & Financial Advisory provides end-to-end advisory services for strategic or financial investors, providing strong agreement advisory and maximum efficiency in energy investments.
M&A in the Energy Market
Energy investments in Turkey require critical financial resources, technical knowledge and experience. Due to the prohibition of license transfer within the scope of the legislation on the energy market, mergers and acquisitions are carried out for license transfers.
M&A transactions are carried out within the framework of Turkish Commercial Law. Energy Market Regulatory Authority (EMRA)permission is required in the legislation on energy markets. The permission of the Competition Authority is also necessary. It is critical to receive expert advice for merger or acquisition agreements regarding energy investment.
