Financial Help for Turkey's Geothermal Energy Development

TO tap Turkey’s significant geothermal energy potential the European Bank for Reconstruction and Development (EBRD) and the Clean Technology Fund (CTF) are launching a programme to support exploratory drilling.

Geothermal energy projects face high risks particularly in their initial stages, including high investment costs and development risks and very limited access to project finance once drilling has confirmed the resource. The new $125 million PLUTO initiative will provide finance and advice to private developers to help minimise these risks.

PLUTO, named after the ruler of the underworld in classical mythology, combines $100 million from the EBRD with $25 million from the CTF, a funding window of the Climate Investment Funds. The programme is part of a global push by multilateral development banks to scale up geothermal energy production.

PLUTO is structured in two phases. Phase one will finance geothermal exploration, drawing on the funds provided by the CTF. If exploration proves successful, the EBRD will be available to finance the final stages of the drilling and the construction of the power plant as the second phase.

PLUTO aims to develop at five new geothermal power plants (GPPs) with a combined capacity of at least 60 MW, generating more than 450 GWh of renewable electricity per year. It will increase the amount of installed geothermal capacity in Turkey by more than 10%, thereby making a substantial contribution to reaching the country’s renewable energy targets.

Turkey has pledged to develop 30% of its total installed capacity from renewable sources by 2023. The objective is to add 34 GW of hydropower, 20 GW of wind energy, 5 GW of solar energy, 1 GW of biomass and 1 GW of geothermal.

As of January 2016, about 600 MW of geothermal capacity has been installed in the country – equivalent to 13% of the country’s potential for geothermal power production, currently estimated at 4.5 GW. These resources are mostly concentrated in western Anatolia, with significant potential also identified in central and eastern Anatolia.

Picture of Pamukkale in Anatolia by Traroth reproduced under CCL.

Friday 15th January 2016

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