Turkey Launches Grants for Industrial Efficiency

This new grant program is an expansion of Turkey's existing "Efficiency Enhancing Project" (VAP) supports, which have been in place for 15 years and have already supported 735 projects in industrial facilities and buildings. The key change is the inclusion of projects implemented through an Energy Performance Contract (EPC) model, specifically targeting industrial and commercial buildings obligated to appoint an energy manager. This financing model allows for initial investment costs to be covered by future energy savings. The program aligns with Turkey's broader "Energy Efficiency 2030 Strategy," which aims to reduce the country's primary energy consumption by 16% by 2030 through a planned investment of $20.2 billion. This is a more ambitious target than the previous National Energy Efficiency Action Plan (2017-2023), which aimed for a 14% reduction. These efforts are part of Turkey's commitment to achieve net-zero emissions by 2053. Qualifying for the grant requires industrial facilities to adhere to the ISO 50001 Energy Management System standard. This international standard provides a framework for organizations to develop a systematic approach to continuously improve energy performance, efficiency, and consumption. Implementing ISO 50001 can lead to energy cost reductions of 5-30% within the first few years and helps ensure compliance with evolving energy regulations. The grant covers 30% of the investment, with a maximum limit of 27,092,663 TL for the current year, a figure that will be adjusted annually. A significant feature is the provision for a 50% advance payment against a guarantee, with the final payment disbursed after a measurement and verification expert confirms that at least 70% of the guaranteed savings have been achieved. This policy move directly creates opportunities for Turkish climatetech startups. Companies like Apollo, which provides energy monitoring and management solutions, and others in the energy SaaS space are positioned to support industrial clients in meeting the technical requirements for these grants. The program's focus on EPCs also opens the door for energy service companies (ESCOs) to take on project implementation and financing, a market segment that has been developing since Turkey's Energy Efficiency Law was enacted in 2007. Beyond this specific grant, the Turkish government offers other incentives for industrial efficiency, including "Voluntary Agreements," where companies committing to a 10% energy intensity reduction over three years can receive cash support. Investments in energy efficiency can also benefit from "5th Region" incentives, which include VAT and customs duty exemptions, regardless of the project's physical location. These programs are part of a multi-faceted strategy to decarbonize an industrial sector that accounted for 12% of Turkey's GHG emissions in 2017.