The Energy Market Regulatory Authority (EMRA) of Türkiye, through its decision dated November 7, 2024, numbered 12993, has introduced a requirement for geothermal energy pre-license holders to implement a 25% capital increase sourced from abroad for foreign investment. This regulation is in line with Article 57 of the Energy Market Licensing Regulation, titled “Share Transfers,” and pertains to foreign capital exceptions to the prohibition on changing the ownership structure of pre-license holders.
Capital Increase Requirement Within 6 Months
Within six months following EMRA’s approval of the share transfer, the pre-license holder must increase its paid-in capital by 25% of the main investment cost and document that this capital increase is sourced from abroad. The documentation must then be submitted to EMRA. The regulation aims to strengthen geothermal energy companies with foreign capital.
Unit Investment Cost for Geothermal Energy: 50 Million TRY /MWm
EMRA has set unit investment costs for each energy source to calculate the foreign capital increase. For geothermal energy, this cost is set at 50 million TRY (approximately USD 1.45 million) per MWm. This figure will serve as the basis for determining the capital increase to be provided by foreign investors.
Penalties for Non-Compliance
If the specified capital increase obligation is not fulfilled, the approval of the share transfer will be deemed invalid, and the company’s pre-license will be revoked. Additionally, the increased capital amount must be maintained until the production license is obtained; otherwise, the license will also be canceled.
Exceptions in the Regulation
According to the Energy Market Licensing Regulation, direct or indirect share transfers in pre-license holder companies is permitted only through foreign-sourced capital. This regulation makes compliance with EMRA’s capital increase requirement mandatory for geothermal energy companies in Türkiye seeking foreign investment.
