Turkey

TR-8:Energy Efficiency Incentive & Financing Programs

Policy Description

Description

Several financial incentive programs are offered to industries for realizing energy-efficiency improvements.

Grants include:

  • YEGM Productivity Enhancement Project (EIP): Energy-saving measures identified through energy audits can benefit from grants up to 30% of the cost of the investment required, with an upper limit of 300,000 TL. The payback period should be 5 years or less (www.eie.gov.tr).
  • KOSGEB: SMEs with an annual energy consumption higher than 200 TOE can receive 50% to 60%,  support depending on the region.  The upper limit of energy-efficiency support is 30,000 TL (www.kosgeb.gov.tr).

Preferential credit lines include:

  • TTGV offers credit for energy-efficiency investments in the range of USD 100,000-1,000,000 with no repayment needed during the first year followed by repayment over a period of four years with no interest (http://www.ttgv.org.tr/en)
  • Turkey development bank offers financial support for private-sector investments in renewable energy and energy-efficiency investments in the production of goods, services, construction expenses, as well as related consulting services. Support is limited to USD 50,000,000. Repayment Periods are long term (2-5 years grace period, 10-15 years at total) (www.kalkinma.com.tr).
  • The Turkey Private Sector Sustainable Energy Finance Facility (TURSEFF) is a framework operation with up to USD 265 million under which credit lines are provided by the European Bank for Reconstruction and Development Bank to eligible commercial banks for on-lending to private sector borrowers to support energy-efficiency and small-scale renewable energy investments. Projects funded under TURSEFF must meet certain performance criteria. Industrial and commercial energy-efficiency projects must save more than 20% in energy usage (www.turseff.org).
  • The World Bank and French Development Agency (AFD) also provide credit lines to Turkish banks for energy efficiency financing. 

Policy Information Expand this section for information on the key features of the policy, such as its date of introduction, categorization, main objective(s) and linkages with other policies.

Policy Categorisation

Policy Instrument Type: Economic, Incentives & Subsidies

Position in the Pyramid

About Us

Participation: Voluntary

Period

Start Date: 2007

Policy Linkages

Supports Energy Efficiency Law Effort Defining
Supports Energy Efficiency Strategy Effort Defining

Agencies Responsible

Turkey development bank
Turkey Private Sector Sustainable Energy Finance Facility (TURSEFF)
Technology Development Foundation of Turkey (TTGV)

Primary Objective: Energy

Objective

Increasing Energy Efficiency investments

Target Group

Industries

Driver of energy consumption or emissions affected by policy: Energy consumption

Implementation Information Expand this section for information on targets, monitoring, verification and enforcement regimes, and implementation requirements and tools.

Coverage

Quantitative Target? no

Progress Monitored? no

Verification Required? no

Enforced? yes

Requirements on the Target Group

  • YEGM EIP: To be eligible, manufacturing facilities must have a minimum of 500 TOE in annual energy consumption. Industrial plants that make voluntary agreements to reduce their energy intensity by at least 10% within three years can also get support grants from YEGM.
  • KOSGEB: SMEs with an annual energy consumption higher than 200 TOE of annual energy consumption are eligible.
  • TTGV: No specific size requirement.
  • TurSEFF: Sub-borrowers need to participate in energy management training through energy audits and regional workshops. They receive advice on existing investment plans, help in identifying the best measures to pursue, and support in structuring investment proposals to obtain financing. [2]

Support by Government

Implementation Toolbox

Impacts, Costs & Benefits Expand this section to find information on policy effectiveness and efficiency.

Impact Quantitative Estimate Qualitative Estimate
Estimated effect on energy consumption or emissions
Estimated costs/benefits for industry Not available. Overall: A World Bank report [3] published in March 2015 identified the following gaps: 1. SMEs have moderate access to financing. There is a lack of incentive programs specifically targeting new financing mechanisms such as energy service companies or vendor leasing. 2. Although there are a number of technical assistance programs funded by donors, they tend to be intermittent and dispersed. There is a lack of a centralized information center that provides comprehensive technical, financial, and implementation information to end users. YEGM EIP: - In the years 2012 and 2013, implementation of 67 projects was approved by the decision of the Energy-Efficiency Coordination Board for financing. - Only 3 applications for voluntary agreements were received by 2013.
Estimated cost for government Not available. Not available.

References & Footnotes

References

[1] Energy Charter Secretariat. 2014. In-Depth Energy-Efficiency Policy Review of the Republic of Turkey. http://www.encharter.org/fileadmin/user_upload/Publications/Turkey_EE_2014_ENG.pdf

[2] Turseff website. http://www.turseff.org/en/page/what-is-turseff

[3] World Bank ESMAP. 2015. Republic of Turkey Institutional Review of Energy Efficiency in Turkey. http://documents.worldbank.org/curated/en/2015/03/24337799/institutional-review-energy-efficiency-turkey

[4] European Energy Network website, Facts and News M54 Turkey. http://www.enr-network.org/assets/files/ADEME/Facts%20and%20News%20M54/FNM54Turkey.pdf