Enhancing Access to Financing for Renewable Energy Investments Through New Regulations

*This Article was originally published in the Legal Industry Reviews

Edition 8 N'1| April 2025 | Türkiye

Turkiye continues to enhance its renewable energy strategy by refining the Renewable Energy Resource Areas (YEKA) model, making it more attractive to investors. In line with this effort, the new amendments on the YEKA Regulation and most recently released YEKA-GES 2024 and YEKA-RES 2024 Specifications introduced key regulatory changes aimed at accelerating project implementation and improving access to financing.

The YEKA model, which has been in place since 2016, was designed to promote large-scale renewable energy projects and domestic generation. Despite Turkiye’s strong ambitions in renewable energy, past challenges have hindered progress. The primary barriers include lengthy permitting processes, difficulties in accessing finance, high local content requirements, and restrictive electricity sales models.

Recent amendments to the YEKA regulations and specifications aim at addressing these challenges, with a view to expediting project development and unlocking new financing opportunities. The updated framework provides significant advantages for investors and financial institutions supporting these projects. The legislative changes target an increase in Turkiye’s current renewable energy capacity to 120 gigawatts by 2035.

One of the most notable changes is the introduction of transmission fee exemptions for YEKA projects, reducing operational costs and enhancing financial viability. Additionally, a newly introduced provision in the tender documents ensures revenue security for power plants in case of energy supply losses due to TEİAŞ directives.

Moreover, with the latest amendments to the tender specifications, contribution fee payments will now be refunded in cases of force majeure. This modification serves as safeguard for investors, ensuring better financial protection against unforeseen circumstances.

A further significant change involves the removal of restrictions on integrated storage facilities for solar and wind energy projects. The new regulation allows energy storage not only from the integrated power plant but also other resources within the scope of ancillary services, promoting more efficient energy utilization in the system.

Another critical improvement is the acceleration of bureaucratic processes. The Ministry of Energy and Natural Resources has introduced a "super permit" mechanism, which aims to reduce the permitting period from over four years to less than two years. This regulatory simplification is expected to provide greater certainty for investors and lenders, thereby facilitating smoother project financing.

To further incentivize investments, flexible electricity sales models have been introduced. Under the new rules, electricity generated from YEKA projects can be sold in the free market for a defined period — 72 months for wind energy projects and 60 months for solar energy projects. This flexibility enables project developers to secure better financial returns and attract institutional investors.

The tender documentation also maintains the rights of the lenders to propose a new contractor to take over the project, in case of the contractor’s default entitling the Administration to terminate the agreement.

With the latest amendments, Turkiye seeks to establish a more efficient investment climate for renewable energy by streamlining permitting, enhancing financial incentives, and ensuring more investor-friendly policies. As Turkiye moves towards its ambitious 2035 capacity targets, these regulatory enhancements are expected to drive greater interest and investment in the sector, supporting the broader goal of a more sustainable energy future.