Introduction: incentives are not “nice to have” — they define bankability

Renewable energy projects in Turkey are built at the intersection of regulated electricity markets, public-law permitting, and investment policy. For a developer, an infrastructure fund, or a corporate offtaker, the key question is rarely “Are there incentives?” The real question is:

Which incentive pathway fits my project, how do I qualify, and how do I keep the benefit without triggering regulatory or contractual default?

Turkey’s incentive landscape for renewables is not a single instrument. It is a portfolio of mechanisms that can be layered (or, in some cases, mutually exclusive), including:

1. Revenue support mechanisms (purchase guarantees / price support)
2. Competitive tender models for large-scale capacity allocations
3. Green attribute certification and tradable instruments
4. Tax relief and investment supports through the national incentives framework
5. Special regimes for unlicensed / self-consumption generation and offsetting

This guide maps those mechanisms in a legally grounded way and highlights the deal points that investors and lenders typically focus on—so you can structure projects that are both compliant and financeable.

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1) The legal architecture: where incentives “live” in Turkish law

Renewable energy incentives in Turkey primarily sit in the electricity market framework and are complemented by national investment support rules.

1.1 Renewable energy legislation (electricity-focused)

At the core is Law No. 5346 on the utilization of renewable energy resources for electricity generation, whose stated purpose includes expanding renewables and integrating them into the economy in a reliable and economic manner. (EPİAŞ)

On top of that, the regulatory system is implemented by sector institutions and secondary rules (market regulations, certification rules, tender specifications, and application procedures). The practical effect is that many “incentives” are delivered through market settlement and regulatory approvals, not by a single grant agreement.

1.2 Market institutions you will encounter

Two names appear constantly in renewable incentive implementation:

• EPDK/EMRA (regulator): licensing, compliance, and enforcement.
• EPİAŞ (market operator): market settlement and certificate systems, including the national guarantee of origin platform for renewable attributes. (EPİAŞ)

1.3 Investment policy framework (cross-sectoral)

Separately, Turkey provides investment supports through its national incentives regime. This framework was restructured by Presidential Decree No. 9903, published in the Official Gazette dated 30 May 2025 (No. 32915). (nazaligundem.com)

For renewable projects, this matters because the incentive certificate route can materially improve economics via tax and customs relief, even if the project is also using electricity-market-based mechanisms.

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2) The incentive map: five pillars for renewable projects

Pillar A — Price and revenue stabilization (support mechanism / purchase arrangements)

Turkey operates a renewable support mechanism widely known as YEKDEM, which—at a high level—enables eligible renewable generators to benefit from pre-defined prices and settlement mechanics. The 2021 reform introduced Turkish-lira-based tariffs and an update methodology tied to a formula that is applied periodically. (Invest.gov.tr)

Pillar B — Large-scale tender model: YEKA (Renewable Energy Resource Areas)

For certain large-scale allocations, the YEKA model uses competitive tenders and project-specific specifications. The governing framework refers to the Renewable Energy Resource Areas Regulation published in the Official Gazette dated 9 October 2016, No. 29852. (Enerji Bakanlığı)

Pillar C — Green attribute monetization: the national guarantee of origin (YEK-G)

The YEK-G system is Turkey’s national guarantee of origin framework, operational since June 1, 2021 and voluntary in nature. It issues certificates for renewable generation and supports both bilateral and organized trading. (EPİAŞ)

Pillar D — Capital expenditure supports and tax relief: investment incentives certificate pathway

Turkey’s investment incentives program provides instruments designed to reduce upfront costs and accelerate returns, typically through VAT exemptions, customs duty exemptions, and other support items depending on the scheme and region. (Invest.gov.tr)
The 2025 restructuring (Decree No. 9903) modernized the architecture and has been framed around updated policy objectives (including green and strategic transformation). (nazaligundem.com)

Pillar E — Self-consumption / unlicensed generation and offsetting

Turkey also supports smaller or self-consumption models under the Unlicensed Electricity Generation Regulation, which sets the legal basis for generating electricity without a license (within defined rules) and includes netting/offsetting mechanisms implemented by procedures and principles. (EPİAŞ)

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3) YEKDEM: how the price support mechanism works in practice

3.1 What YEKDEM is (commercially)

From a lender’s perspective, YEKDEM is primarily about revenue predictability. It can reduce merchant price exposure and improve project bankability—particularly when paired with strong EPC/O&M structures and a stable permitting record.

3.2 2021 reform: Turkish-lira tariffs and periodic updates

A major turning point came with the updated tariff scheme introduced by a presidential decision published in the Official Gazette on 30 January 2021. Government communications emphasize that the new feed-in tariffs and local content premium are denominated in TRY and updated at set intervals based on a formula. (Invest.gov.tr)
Practice summaries also highlight that the revised mechanism is TRY-based, indexed through a formula with a hard cap design. (Paksoy)

3.3 Indicative tariff levels (illustrative)

Public investment communications provided indicative starting tariff levels for resource types under the new scheme (e.g., hydro, wind, geothermal, solar), with periodic adjustments under the formula. (Invest.gov.tr)
For deal documents and lender models, the legally decisive numbers are those applicable to your commissioning window and technology classification under the relevant decision and secondary rules—so the project’s “eligibility + commissioning date + resource” matrix must be verified carefully.

3.4 Domestic component premium (local content)

Alongside the base tariff, the framework continues to recognize additional support for domestically manufactured components (structured as a premium, with defined scope and duration). (Paksoy)
This premium can be economically significant, but it creates compliance exposure: local content claims must match certification rules, procurement documents, and technical acceptance files. A mismatch can later translate into payment disputes or enforcement risk.

3.5 The legal “gotchas” lenders and investors test

1. Commissioning definition and timing: whether the facility is “in operation” for eligibility purposes can be tied to official acceptance milestones, so delay risk becomes a legal risk.
2. Resource classification: the plant’s resource type and configuration must align with the applicable table/classification.
3. Regulatory change risk: projects often include stabilization clauses (contractual) even when they cannot bind public law; the goal is to allocate risk among investors, EPC, and lenders.
4. Audit trail: the stronger your documentary proof (permits, acceptance reports, metering configuration), the safer the revenue stream.

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4) YEKA: incentives through competitive tenders and project specifications

4.1 What YEKA does differently

YEKA is designed to allocate resource areas and/or connection capacity through competitive processes, usually for utility-scale projects. The tender model is regulated by the YEKA framework in secondary legislation (Official Gazette 29852, 9 October 2016). (Erdem & Erdem)

4.2 Why YEKA can be attractive (and demanding)

YEKA projects can be attractive because they may package “incentives” as a project ecosystem: allocated capacity, structured timelines, and a defined payment / settlement framework. But they also impose heavy obligations (performance bonds, implementation schedules, and sometimes local manufacturing or technology commitments).

For example, the YEKA SPP-2024 Specifications explicitly state the Ministry’s undertaking that the energy generated will be treated under YEKDEM throughout the purchase period and that pricing/payment will follow the relevant rules and specifications. (Enerji Bakanlığı)
The same specifications include detailed guarantee letter requirements (a typical tender-risk feature that investors must price into bid strategy). (Enerji Bakanlığı)

4.3 Legal due diligence for YEKA bidders: a targeted checklist

• Tender documentation compliance (format, guarantees, corporate authorizations)
• Timeline feasibility (grid connection, land access, permitting critical path)
• Change in control restrictions and financing step-in design
• Penalty exposure and termination triggers
• Alignment between tender obligations and EPC/O&M contracts

In practice, YEKA disputes often arise from implementation delays, documentary deficiencies, or interpretation of specifications—not from the underlying technology.

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5) YEK-G: monetizing renewable attributes through guarantees of origin

5.1 What YEK-G is and why it matters

YEK-G is Turkey’s national guarantee of origin system and organized market, designed to verify the renewable origin of electricity in a standardized way. It has been operational since June 1, 2021 and participation is voluntary. (EPİAŞ)

5.2 Certificate mechanics (compliance essentials)

Under the YEK-G framework:

• certificates are issued electronically for renewable generation (upon request by the relevant license holder),
• one certificate corresponds to 1 MWh, and
• certificates are valid for 12 months from the end of the generation period. (EPİAŞ)

5.3 Where YEK-G creates value

• Corporate buyers increasingly demand traceable renewable sourcing claims.
• Suppliers can substantiate portfolio disclosure claims through certificates. (EPİAŞ)
• Generators can create an additional revenue line (or improve offtake pricing) by transferring certificates in bilateral or organized markets.

For investors, YEK-G is not a subsidy; it is a marketable attribute that can support corporate PPAs and sustainability-linked financing narratives—provided the asset’s metering and certification workflow is clean.

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6) Investment Incentives in Turkey: tax and customs relief that improves project economics

6.1 The 2025 restructuring: Decree No. 9903

Turkey’s investment incentives system was restructured with Presidential Decree No. 9903, published 30 May 2025 (Official Gazette No. 32915). (nazaligundem.com)
From an investor’s perspective, this matters because incentive certificate eligibility and benefit calibration can influence:

• imported equipment costs,
• construction spending,
• effective tax rate over the project’s life.

6.2 Typical instruments (how they usually show up in deals)

Public incentive guides describe common support items such as:

• VAT exemption for machinery and equipment (and, in some cases, construction expenditures depending on program design),
• customs duty exemption for imported machinery and equipment,
• additional supports that vary by program, region, and classification. (riyadh-emb.mfa.gov.tr)

6.3 Practical structuring notes for renewable projects

1. SPV and scope discipline: Incentive certificates tend to be project- and item-specific; scope creep can create audit problems.
2. Procurement alignment: Your EPC and procurement plan should map to the eligible machinery/equipment list and timing rules.
3. Bankability: Lenders often require confirmation that incentive benefits are not jeopardized by change in control, merger, or asset transfer.
4. Exit strategy: If the exit involves share transfer or asset sale, plan for notification/approval mechanics early.

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7) Unlicensed generation and offsetting: incentives for self-consumption models

7.1 The legal basis

Turkey’s Unlicensed Electricity Generation Regulation establishes rules for generating electricity without a license within defined eligibility boundaries, with the policy aim of enabling consumers to meet electricity needs through facilities close to consumption points and integrating small-scale generation into the economy. (EPİAŞ)

7.2 Offsetting and netting mechanics

Implementation rules for offsetting (including for facilities located in different regions and monthly offsetting models) are set out in procedures and principles published with reference to the Official Gazette dated 24 June 2023, No. 32231. (EPİAŞ)

7.3 The legal risks investors underestimate

• Technical compliance upgrades can be imposed over time, affecting operational cost.
• Grouping/transfer rules can be complex for portfolio owners.
• Metering, notification, and data entry obligations can create settlement issues if mishandled.

Unlicensed models can be highly attractive for industrial self-consumption and rooftop deployment, but they require tight compliance operations—especially if you plan to finance or sell the portfolio.

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8) Putting it together: which incentive route fits which project?

Utility-scale merchant or semi-merchant assets

• Often combine: (i) corporate offtake / PPA structures + (ii) certificate value (YEK-G) + (iii) investment incentives certificate supports.
• Key legal focus: offtake enforceability, change-in-law allocation, and certificate deliverability.

Price-supported / scheme-backed assets

• Often prioritize: (i) YEKDEM eligibility and commissioning timeline certainty. (Invest.gov.tr)
• Key legal focus: acceptance milestones, resource classification, and documentary audit trail.

YEKA tender-based projects

• Typically: (i) tender economics + (ii) performance security management + (iii) strict timeline governance. (Enerji Bakanlığı)
• Key legal focus: tender compliance, penalties, and bankable step-in.

Rooftop / industrial self-consumption portfolios

• Typically: (i) unlicensed regime + (ii) offsetting rules + (iii) investment incentives for equipment where applicable. (EPİAŞ)
• Key legal focus: technical compliance, portfolio transfer rules, and settlement integrity.

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9) The investor’s legal risk register: what can break incentives

1. Permitting critical path risk: environmental, zoning, land rights, and grid connection delays can undermine commissioning windows.
2. Change in control and financing step-in: project finance structures must respect regulatory constraints and tender specifications.
3. Documentation and audit risk: incentive mechanisms depend on clean records—especially for local content claims and certificate issuance. (EPİAŞ)
4. Settlement and metering configuration: technical errors often become payment disputes.
5. Regulatory amendments: rules can evolve; contracts should allocate change-in-law risk realistically (without assuming public-law “stabilization”).

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10) A practical “client-ready” due diligence checklist

If you are buying, financing, or developing a renewable project in Turkey, consider validating:

• Which incentive mechanism(s) are applicable: YEKDEM, YEKA, YEK-G, investment incentives, unlicensed/offsetting. (Invest.gov.tr)
• Commissioning and acceptance timeline feasibility (and evidence)
• Land rights (title, easements/usufruct, access, zoning status)
• Grid connection status and technical compliance plan
• Procurement mapping to incentive certificate scope (VAT/customs relief) (riyadh-emb.mfa.gov.tr)
• Certificate workflow readiness (YEK-G issuance, transfer, expiry management) (EPİAŞ)
• Tender obligations (if YEKA) and guarantee/penalty exposure (Enerji Bakanlığı)

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