Türkiye will keep investing in renewable energy to decarbonize its energy system and expand electrification, Treasury and Finance Minister Mehmet Şimşek said Wednesday.
Şimşek said the greater challenge is finding the money for such ambitious goals, and that public funds alone will not be enough.
He was speaking at a session on the sidelines of COP31, the U.N. climate conference being held in Antalya, a Mediterranean resort province in southern Türkiye.
Şimşek said calculations show that about $300 billion would be needed to reach the goal of decarbonizing Turkish industry. "We believe this can be achieved, but the key questions to answer are how much it will cost and how it will be financed," he said, according to a Turkish transcript of his speech reported by Anadolu Agency (AA).
He said Türkiye’s fiscal position is strong. Even though more than $100 billion was spent on rebuilding infrastructure after the devastating early 2023 earthquakes, Şimşek said Türkiye’s budget deficit is about 3% of gross domestic product (GDP).
Public debt is about 22% of GDP, which he called modest, so the government has significant fiscal room.
To close the gap, he said, Türkiye needs the support of multilateral development banks such as the World Bank and the European Bank for Reconstruction and Development (EBRD), as well as the International Finance Corporation (IFC).
The aim is not only to borrow from them but to mobilize private capital and reduce investment risks, Şimşek said. By providing guarantees and taking on risk, the banks can open the way for private investment, he added.
Net zero by 2053
Şimşek called 2026 an extremely difficult year, saying the world had faced the biggest energy supply shock in recent history, with significant macroeconomic effects. He said the 2053 net-zero target is very important to Türkiye.
"We are an emerging market and a growing economy, so we have to keep growing. But can you decarbonize while you grow? Can you build your green industry? Those are the questions ahead of us," he said.
On energy, Şimşek said Türkiye aims to have 175 gigawatts of solar and wind power by 2040. He said a low-carbon path is not an option but a necessity for Türkiye, since more than half its exports go to Europe. The main challenge, he said, is producing energy that is both cheap and clean.
Şimşek said Türkiye imports more than 70% of its primary energy, which accounts for a large share of the current account deficit. Over the past 10 years, he said, the country has paid about $600 billion for imported oil and natural gas, more than its gross external debt.
Expanding renewable capacity is therefore clear-cut, he said, and will strengthen economic resilience. By decarbonizing the energy system while spreading electrification, Türkiye aims to cut its dependence on energy imports and its macrofinancial risks, he said. It also lets the country offer industry cheaper and more competitive energy, he noted, though many steps remain.