The World Bank has approved nearly $300 million in funding that will support expansion of geothermal development in Turkey.
According to the World Bank, the funding opportunity will encourage private sector investment in geothermal energy development in Turkey by reducing risks for investors through a risk sharing mechanism (RSM) and by providing access to long-term financing.
The project includes an RSM for resource validation to support the exploration and test drilling stages, and a loan facility for resource development that will support power plant development.
“Increasing renewable energy generation capacity is critical to achieving energy security and climate change mitigation in Turkey,” Johannes Zutt, World Bank country director for Turkey, said in a Nov. 1 statement. “The renewable energy sector has been growing rapidly in Turkey over the past decades, and geothermal power plants … can provide low-carbon baseload power to drive economic growth and boost prosperity.”
Development Bank of Turkey and Industrial Development Bank of Turkey will be the two financial intermediaries implementing the project. These banks will benefit from two loans that will be co-financed with their own resources. The World Bank said that financing with a long maturity period and capacity building for the participating financial intermediaries is expected to incentivize them to take more risk at earlier development stages than under usual market conditions.