The Energy Regulation and Markets Review - Stikeman Elliott

Chapter 24
Turkey
Zeynel Tunç 1
I
OVERVIEW
Turkey’s general energy policy is to maintain a high-quality, reliable, continuous and costeffective
supply while maintaining a liberal, competitive, transparent, non-discriminatory
and stable market. Additionally, Turkey intends to reduce its dependence on imported
energy. To achieve these ends, the Turkish government has been reforming its energy laws
while trying to promote private investment in its energy market. Recent trends, in particular
in the electricity and renewable energy sectors, show an even stronger push towards
privatisation that corresponds with the growth of Turkey’s economy and population. As
such, this chapter will focus exclusively on Turkey’s electricity law, the developments taking
place in the privatisation of its electricity market and on renewable energy.
Following the reform programme and the opening up of the Turkish economy
in the 1980s, the statutory monopoly of the Turkish Electricity Company (‘TEK’) was
abolished by the Electricity Act in 1984, and it became possible for private companies to
engage in electricity generation activities under the transfer of operating rights (‘TOOR’)
and build–operate–transfer (‘BOT’) contracting models. The main objective of the
Electricity Act was simply to provide authorisation to private companies rather than
giving concessions. The Council of State (‘the Daniştay’), however, decided in 1996 that
transferring electricity generation activities through the TOOR and BOT contracting
models was just another way of giving concessions; this decision led to a change in
the concession law to govern the implementation of these contracting models. In time,
four different contract models were used to attract private investors, including the
BOT, build–own–operate (‘BOO’), autoproducer and TOOR models. The BOT and
BOO approaches had attracted substantial new power plant investments because these
approaches had purchase and payment guarantees, which were backed by guarantees
issued by the Turkish Treasury.
1 Zeynel Tunç is a senior associate at Paksoy Attorneys at Law.
290