The new $125 million PLUTO initiative provides finance and advice to private developers at exploratory stages in a move to tap Turkey's significant potential for geothermal energy and help the country meet growing demand for electricity, said the bank in a written statement.
Geothermal energy projects face high risks, particularly in their initial stages, including high investment costs and development risks and very limited access to project finance once drilling has confirmed the existence of the resource.
PLUTO, named after the ruler of the underworld in classical mythology, helps minimize these risks, according to the statement.
PLUTO combines $100 million from the EBRD with $25 million from the Clean Technology Fund, a funding window of the Climate Investment Funds. The program is part of a global push by multilateral development banks to scale up geothermal energy production.
“Turkey is probably the hottest geothermal market in the world, not because of the temperature of its hot springs, but thanks to its vibrant private sector and the strong regulatory support that has been put in place by the government,” said EBRD Managing Director for Turkey and Central Asia Natalia Khanjenkova.
Turkey ranked first globally for new geothermal power capacity last year, according to the Renewables 2016 Global Status Report. The country accounts for half of new additions to global capacity, according to the report, and is well on its way to meeting the goal of having 1 GW of geothermal power capacity in place by 2023.
The EBRD – a leading investor in renewable energy in Turkey – has financed over a third of the total installed capacity for geothermal energy. It has provided finance to seven geothermal power plants in Turkey, including Efeler, the largest in Turkey and the second-largest in Europe, according to the statement.
Under the PLUTO initiative, the EBRD aims to develop at least five new geothermal power plants with a combined capacity of at least 60 MW, generating more than 450 GWh of renewable electricity per year. It will increase the amount of installed geothermal capacity in Turkey by more than 10 percent, thereby making a substantial contribution to reaching the country's renewable energy targets, said the statement.
The conference in İzmir, a Turkish city at the heart of the country's geothermal resources, brought together over 180 local and foreign developers, suppliers, investors and policy-makers to discuss Turkey's significant geothermal energy potential and project development opportunities.