Sovereign Wealth Fund plans greenfield energy investments

Published 04.10.2019 00:16

The Turkish Sovereign Wealth Fund is set to make greenfield investments in projects based on the cooperation with the private sector or foreign capital in petrochemical, mining and energy generation from local sources.

Plans for the Turkish Wealth Fund (TVF) to take part in investments in the energy sector were highlighted in the New Economy Program (NEP), which covers the period 2020-2022, and will be implemented under the main theme of "Change Begins."

TVF officials said they will support projects aimed at reducing input costs and imports in the energy sector. Besides, mineral exploration and drilling activities will continue rapidly and the reserves found will be brought into the economy with new business models and financing mechanisms under the leadership of the TVF. In this context, the fund will support petrochemical, mining and energy generation from domestic sources through fixed capital investments based on cooperation with the private sector or foreign capital. Thus, the TVF will be involved in energy investments with non-public sector players for the first time.

Among the TVF's projects for petrochemical, mining and energy generation from domestic sources, the priority will be a sustainable reduction of the current account deficit. Projects to be implemented with private sector players, under the leadership of the TVF, will be "investments from scratch."

On the other hand, energy efficiency projects will be accelerated and cost reduction will be given priority within the scope of the NEP.

Renewable Energy Resource Areas tenders and projects that aim at localization of technologies will also continue. In addition, minerals, especially boron, will be processed and converted into value-added products and presented to international markets. While Turkey is projected to grow by 5% during the NEP period, it is also expected to increase its energy demand in parallel with this growth. Although the share of domestic and renewable energy sources in electricity generation is growing, growth in energy demand is projected to boost the import bill.

The energy import bill is expected to be $41 billion by the end of 2019, $42.5 billion in 2020, $43.3 billion in 2021 and $45.7 billion in 2022.

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