Turkiye has become an important market for renewable energy investments, attracting investors interested in solar power generation and long-term energy projects. However, buying a solar power plant in Turkiye involves more than evaluating its installed capacity, electricity production and expected revenue. Investors must also examine the project’s legal status, regulatory compliance, land rights, grid connection arrangements and contractual obligations.
Legal due diligence is a critical step before acquiring a solar power plant in Turkiye. A comprehensive review helps foreign investors identify potential liabilities, assess regulatory risks and make informed investment decisions before signing a share purchase agreement or an asset transfer agreement.
This guide explains the main legal considerations for foreign investors planning to acquire an operational solar power plant or invest in an existing solar energy project in Turkey.
1. Can Foreign Investors Buy a Solar Power Plant in Turkiye?
Foreign investment in Turkiye is generally permitted, subject to applicable legislation and sector-specific requirements. Foreign investors may consider acquiring shares in a Turkish company that owns or operates a solar power plant, establishing a Turkish project company or purchasing eligible project assets.
The appropriate acquisition structure depends on the project’s licensing status, ownership structure, financing arrangements and regulatory requirements.
Before proceeding, investors should determine whether the transaction involves:
- A share acquisition in the company operating the solar power plant.
- An asset acquisition involving the plant and associated rights.
- An investment in a project that has not yet entered commercial operation.
- A joint venture with an existing Turkish energy company.
Each structure presents different legal, financial and regulatory considerations. In particular, a share acquisition may expose the buyer to historical liabilities of the target company, while an asset acquisition requires careful examination of which licenses, contracts, permits and property rights can legally be transferred or must be obtained separately.
2. EMRA Licensing and Regulatory Compliance
The Energy Market Regulatory Authority (EMRA), known in Turkish as Enerji Piyasası Düzenleme Kurumu (EPDK), plays a central role in regulating Turkey’s electricity market.
Under Law No. 6446 on the Electricity Market, licensed electricity generation activities are subject to applicable licensing requirements. Depending on the project’s structure and regulatory classification, the relevant framework may involve a preliminary license, a generation license or the rules applicable to unlicensed electricity generation.
Before acquiring a solar power plant, foreign investors should verify:
- Whether the project operates under the correct licensing framework.
- Whether the relevant license or approvals remain valid.
- Whether the plant complies with applicable licensing conditions.
- Whether outstanding regulatory obligations or administrative sanctions exist.
- Whether the proposed acquisition or change of control requires regulatory approval, notification or another procedure.
A license should never be assumed to transfer automatically with the purchase of a company or physical assets. The legal consequences depend on the transaction structure and the applicable electricity market legislation.
3. Land Ownership, Lease Agreements and Zoning
Land rights are among the most important elements of solar power plant due diligence in Turkiye. A project may have attractive production figures but still face significant legal risks if its land rights are defective or insufficient for the intended operation.
Investors should review the land registry records, ownership documents, lease agreements, easements and any registered mortgages, attachments or other restrictions affecting the project site.
The review should also consider:
- Whether the land can legally be used for the intended energy project.
- Whether the relevant zoning and construction approvals have been obtained.
- Whether lease agreements will remain effective following the acquisition.
- Whether access roads and transmission infrastructure benefit from sufficient legal rights.
- Whether the project is affected by agricultural land restrictions or other land-use requirements.
Where the project depends on leased land, the remaining lease term, rent adjustment mechanisms, termination provisions and change-of-control clauses deserve particular attention.
4. Grid Connection and Electricity Sale Agreements
The commercial value of a solar power plant depends not only on its technical performance but also on its ability to deliver electricity under legally effective arrangements.
Foreign investors should examine the project’s grid connection and system use agreements, relevant technical approvals and any outstanding connection-related obligations.
Electricity sale arrangements should also be reviewed carefully. Depending on the project, these may include bilateral power purchase agreements, market participation arrangements or support mechanisms available under the applicable renewable energy legislation.
Important contractual issues include electricity pricing, payment terms, settlement procedures, curtailment provisions, contractual duration, termination rights and liability for non-performance.
Investors should not assume that historical electricity revenues or support arrangements will continue unchanged after an acquisition. The applicable contractual terms and regulatory framework must be verified for the specific project.
5. Environmental Permits and Construction Approvals
Environmental compliance is another essential element of solar power plant acquisition in Turkiye.
Depending on the project, its location, capacity and applicable legislation, the investor may need to examine environmental impact assessment decisions, construction permits, zoning approvals, land-use permissions and other relevant administrative documents.
The due diligence process should identify any missing approvals, pending administrative proceedings, environmental obligations or conditions that could affect the plant’s continued operation.
Investors should also review whether the plant’s actual construction and operation correspond to the approved project documents. Material differences may create regulatory, contractual or operational risks.
Because Turkiye’s regulatory framework can change, investors should verify the rules applicable to the particular project at the time of the transaction.
6. Corporate Due Diligence and Hidden Liabilities
When acquiring shares in a company that owns a solar power plant, the buyer may inherit risks associated with the company’s historical activities.
A corporate due diligence review should cover the company’s articles of association, share ownership, corporate approvals, existing financing arrangements, litigation, employment obligations and material contracts.
The review should also identify outstanding tax liabilities, security interests, guarantees, related-party transactions and potential disputes with contractors, suppliers or business partners.
For asset acquisitions, the analysis should focus on ownership of the relevant assets and equipment, contractual transfer requirements, outstanding payment obligations and the legal continuity of essential project rights.
Identifying these issues before completion can help the parties negotiate appropriate contractual protections.
7. Share Purchase Agreements and Legal Protection for Investors
A well-drafted share purchase agreement or asset purchase agreement is central to protecting foreign investors acquiring a solar power plant in Turkey.
Depending on the transaction, the agreement may include representations and warranties concerning ownership, licensing, permits, financial statements, material contracts, litigation and regulatory compliance.
Other important provisions may address:
- Conditions precedent to closing.
- Required regulatory approvals and third-party consents.
- Indemnification for identified liabilities.
- Purchase price adjustments and escrow arrangements.
- Disclosure of known risks.
- Termination rights and dispute resolution.
The appropriate protections depend on the findings of due diligence, the bargaining position of the parties and the structure of the acquisition.
Legal advice should be obtained before signing binding transaction documents, particularly where the project involves foreign financing, multiple jurisdictions or complex regulatory requirements.
8. Why Legal Due Diligence Matters for Foreign Energy Investors
Foreign investors may face additional challenges when evaluating a Turkish solar power plant, including language barriers, unfamiliar regulatory procedures and differences between Turkish law and the law of their home jurisdiction.
Independent legal due diligence helps investors understand the legal position of the project before committing substantial capital.
A Turkish energy law lawyer can assist with reviewing licenses and permits, verifying property rights, examining commercial contracts, assessing regulatory exposure and structuring the acquisition documents.
Where necessary, legal advice can be coordinated with technical, financial, tax and environmental specialists to provide a more complete assessment of the investment.
Conclusion: Buying a Solar Power Plant in Turkiye
Buying a solar power plant in Turkiye can offer foreign investors an opportunity to enter the renewable energy market. However, the success of an acquisition depends on more than projected electricity revenues or the physical condition of the facility.
A thorough legal due diligence process should examine EMRA licensing, land rights, grid connection, environmental compliance, corporate liabilities and the contractual structure of the transaction.
By identifying legal risks before completion, investors can make better-informed decisions and negotiate appropriate protections for their investment.
Considering a solar energy investment in Turkiye? Professional legal assistance can help assess the project’s regulatory status, identify transaction risks and prepare the documentation required for a properly structured acquisition.
No Responses