Energy SeminarTurkish-Dutch Energy

CooperationRotherdamJune 2011

Turkey Sustainable Energy Financing FacilityTürkiye Sürdürülebilir Enerji Finansman Programı

TURSEFF is supported by:

TURSEFF was developed by EBRD

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• Turkey is 6th largest electricity market in Europe. Annual consumption growth has been 8% over last 20 years. It is expected that Turkey will double electricity demand as of 2020.

• Most of the electricity demand is being supplied from fossil fuels

• The electricity market in Turkey has been liberalized together with several new amended laws since 2001. However the real operation of spot market has been realized since 2009.

• The new Renewable Energy Law has been issued and brought a visibility to the market.

• Three Nuclear Power plant construction has been planned. The agreement for the first plant is done with Russia.

TURKISH ENERGY MARKET

Turkish Energy Market

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Electricity Sources

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• Security of Energy Supply: Additional generating capacity and increased focus on energy efficiency are required to improve the security of supply.

• Reduction of Energy Import Cost:Turkey is a major energy importer and a substantial part of these imports, are used for electricity generation.

• The reduction of CO2 emissions – Turkey’s greenhouse gas (GHG) emissions are growing rapidly. Total GHG emissions rose from about 125 million tons of carbon dioxide (CO2) equivalent in 1990 to about 265 million tCO2 in 2007. In particular, CO2 emissions are projected to continue to increase and exceed 600 mtCO2 by 2020 in the Government’s reference case scenario. Turkey’s emissions are now the 23rd highest in the world at 0.8% of global emissions.

Challanges in the Market

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Renewable Energy Potential in Turkey

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• The New Renewable Energy Law brings guaranteed purchase for renewable sourced electricity.

• Premiums in purchasing price for Locally Manufactured Renewable Energy Equipments.

• Turkey has wide Geothermal sources.

• Turkey has rich Biogas sources. (Garbage Waste, Sludge from Water Treatment, Biological Wastes)

• High focus on Energy Efficiency.

• High Electricity prices make feasible projects.

Oppurtunities in the Market

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• Unreferenced suppliers causing distortion in prices.

• High challange in the market.

• Short Term profit expectation.

• High focus on Profit.Market Environment

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How to “SELL” investment in sustainable energy

Developed by EBRD (European Bank for Reconstruction and Development)

Part of EBRD’s Sustainable Energy Financing Programs. Those Programs: Started in 2004. Total Package is 1.3 Billion $. Currently availible 11countries. Through 35 partner bank 700 million $ loan has been disbursed.

Supported CTF (Clean Technology Fund) and EU

The ultimate goal is Enegy Efficiency Projects Renewable Energy Projects Reducing Greenhouse Gas Emissions

What is TURSEFF and MIDSEFF ?

Last of the SEFF program has been launched in Turkey as of 2010 with 265 Million $The program will start soon in:PolandBelarusKyrgystan

Bulgaria• Since 2004• 250 million $

Slovakia• Since 2007’• 85 million $

Ukraine• Since 2006• 210 million $

Georgia• Since 2007• 60 milliom $

Rumania• Since 2008• 110 million $

Bulgaria• Since 2005• 75 million $

West Balkans• Since 2009• 85 million$

Kazakhstan• Since 2008• 75 millon $

Moldavya• Since 2009• 30 million $

Russia• Since 2009 • 300 million $

Other SEFF’s

More than 1 Billion $ credit line is availible in Turkey

TURSEFF EBRD provided 265 Million $ to Five Turkish

Commercial Banks

(Akbank, Işbank, Garanti Bank, Vakıf Bank, Deniz Bank)

MIDSEFF EBRD and EIB jointly provided 700 Million € to

four Turkish Commercial Banks

(Akbank, Garanti Bank, Vakıf Bank, Deniz Bank)

Loan Structure

TURSEFF has a wide range of application and finances 100% of the projects

TURSEFF* Households (up to 75.000 $) Suplliers (up to 1 Million $ Capacity Increase

only) Renewable Energy Projects (up tp 5 Million $) Energy Efficiency Projects (up tp 5 Million $)

Loan Target

* Companies should be eligible with SME criteria of EU.Production, marketing, distribution of tobacco products, hard liquor, alcohol (other than breweries, wineries, low/medium alcohol beverages), gambling, arms and minitary equipment are excluded.

MIDSEFF covers mid sized projects and rehabilitations.

MIDSEFF*• The range of individual Sub-loan: € 10 - 40

million (Total investment cost < € 50 million. ) • Greenfield run-of-river Hydropower Plants

(HPPs) or Rehabilitation of Privatised HPPs including dams (5- 40 MW)

• Wind Power Plants (5 – 50 MW)• Geothermal Power Plants (5 – 50 MW) • Biomas and Biogas Sub-projects (5 – 50 MW)• Solar Power Plants (min 1500 kWp)

Loan Target

*Production, marketing, distribution of tobacco products, hard liquor, alcohol (other than breweries, wineries, low/medium alcohol beverages), gambling, arms and minitary equipment are excluded.

How TURSEFF

worksPROFITABILITY

TechnicalAssistance

Implementation Team

Commercial/IndustrialEnergy Efficiency &Renewable Energy Projects

Standardised Process

Comprehensive Assessment

Verification Consultant

Residential / Small-Scale Energy Efficiency

Loan FacilityUS$ 260 m

Real Companies — Real Benefits

•Cattle Farm secures energy supply with biogas plant

•US$ 2 million investment

•Over 3 million kWh electricity and 3.7 million kWh heat produced per year

•Waste utilization

•Annual savings: US$ 620,000

•Payback 3.3 years

Real Companies — Real Benefits

•Direct Finance

•Hotels in Bodrum & Antalya

• Furniture Factory in Antalya

•Cement Company in Milas

•Vendor agreements

•Under consideration

Real Companies — Real Benefits

• Financed US$ 4.1 million

•State of the art plant

• 3.46kWh per each US$1 invested

•Payback period – 10 years

Small Hydropower Plant

Real Companies — Real Benefits

•Company invests US$ 2 million in landfill biogas project

•Annual energy production 9.4 GWh

•US$ 1.3 million revenue / year

•Payback period < 2 years

•A US$ 1.4 million investment in biomass boilers “spices up” savings

•Savings – US$ 0.6 million per year

•Payback – 2.8 Years

Real Companies — Real Benefits

Real Companies — Real Benefits

Shopping Mall / İzmir

•With US$ 3,653,000 investment in micro turbine combined heat and power generation plant

• 2,000 kWh turbine power generation

• 1,894 kWh cooling and 2,614 kWh heating

•US$ 1,092,000 SAVED – EACH YEAR

•Payback period – 4.6 years

• IRR – 30%

Real Companies — Real Benefits

•With a US$ 500,000 investment in energy efficient ovens

•Doubled production capacity

•Reduced gas consumption by 300,000 M3/year

•US$ 100,000 SAVED – EACH YEAR

• IRR – 25%