May 2023

Economic & business news from Türkiye

Project to build a very high-speed line between Istanbul and Ankara

As part of the development of modes of transport, particularly rail, Türkiye has announced the future construction of a new very high-speed line between Istanbul and Ankara which will reduce the travel time between these two cities to 89 minutes or 1h30. The journey time of the current railway line varies between 4.5 and 5 hours.

This new line will be built on the Ankara Nallıhan and Sakarya route. Feasibility tests have been carried out. The length of the line will be 344 km. The project will include the construction of 19 viaducts with a length of 14 km and 52 tunnels with a length of 120 km. The train will reach a speed of 350 km/h

The development of transport, particularly rail, is one of the government's priorities. Rail has in fact absorbed half of the budget allocated to the Ministry of Transport and Communications as part of its 2023 investment program.

Furthermore, as part of the government's 2053 objectives, the country plans to increase its TGV high-speed train network to 13,400 km and its total rail network to 28,600 km.

Source: Haber Global, April 14, 2023

Türkiye now has nuclear energy

The Akkuyu Nuclear Power Plant, located in Mersin province on Türkiye's Mediterranean coast, has officially received the status of a nuclear facility with the delivery of the first nuclear fuel to the plant site.

Thus, Türkiye has joined the club of countries equipped with nuclear energy to produce electricity.

Construction of the plant, started in 2018, is still underway by Russia's Rosatom and is expected to be completed in 2026. This is the largest joint investment made between Türkiye and Russia.

The plant will have an installed capacity of 4800 MW via four reactors each with a production capacity of 1200 MW. It is expected to have a lifespan of 60 years with a potential extension of another 20 years and will produce energy 24/7. Once operational, the factory is expected to provide employment to around 4,000 people.

It is expected to produce 35 billion kWh of electricity annually, which will satisfy around 10% of Türkiye's local needs. The plant will also help reduce the country's natural gas imports by USD 1.5 billion per year.

Thanks to the transfer of skills and the sharing of experience during the construction of the site where around 30,000 people were employed, Türkiye is aiming to build two more nuclear power plants in different regions of the country.

Source: Daily Sabah, April 26, 2023

Veolia wins a major contract in Türkiye

Veolia has won the operation and maintenance contract for Türkiye's first waste-to-energy plant, the largest in Europe, located in Istanbul.

With a processing capacity of around 1.1 million tonnes of non-recyclable household waste per year, the plant will save nearly 1.5 million tonnes of carbon emissions per year, in particular thanks to the production of 560,000 MWh of electricity, the equivalent of consumption of 1.4 million inhabitants of the metropolis.

This is the first installation of this type in Türkiye which aims to decarbonize the waste sector through the generalization of energy recovery and recycling to avoid the use of landfilling, which emits more carbon. This project directly contributes to the country's carbon neutrality objective by 2053.

Under the terms of the agreement, Veolia will be responsible for the entire operation and maintenance of the plant in compliance with EU environmental standards, as well as the improvement of its energy performance and its performance.

Source: Veolia, April 21, 2023

Discovery of a major oil deposit

Türkiye has discovered a new oil field in the Cudi Gabar region, a mountainous region located in the northeast of Şırnak province (southeast of the country).

According to experts, this new discovery represents a major economic opportunity for Türkiye, which should become more energy independent and reduce its dependence on oil imports. The site has, in fact, a daily production capacity of 100,000 barrels, which will meet 10% of the country's daily oil consumption. The value of this new discovery would represent 12 billion USD.

Türkiye's oil production has doubled in the space of 6 years, from 40,000 to nearly 80,000 barrels per day. So, with this new discovery, the daily oil production capacity will increase to 180,000 barrels. This will represent a 125% increase in daily production capacities.

The oil will be extracted at a depth of 2,600 meters with almost 100 wells to be drilled in the region.

Source: Dünya, May 2, 2023

Türkiye inaugurates Europe's largest solar power plant

The Karapinar solar photovoltaic power plant, located in Konya, south-central Türkiye, is the largest solar power plant in Europe and one of the five largest power plants in the world.

Developed by Kalyon Energy under the YEKA (Renewable Energy Resource Zone) program, a government initiative to establish renewable facilities, the solar plant has a capacity of 1,350 MW, 3.2 million solar panels and covers an area of ​​2000 hectares, approximately the size of 2800 football stadiums. The site will produce 3 million kWh of #electricity per year, enough to provide electricity to 2 million people and avoid the need to use equivalent fossil fuel resources worth USD 450 million.

The solar panels used were manufactured by Kalyon PV in a gigafactory inaugurated in 2020 in Ankara and whose investment amounted to 400 million USD.

The plant, which cost 1 billion USD, will prevent the emission of 1.5 million tonnes of carbon per year and increase the share of solar energy in the total energy production by 20%. Türkiye.

The facility is an important step for Türkiye as it aims to reduce its vast energy imports and boost renewable energy production. The inauguration comes as Türkiye has just discovered a large oil deposit in the south-east of Türkiye, supporting the country's strong energy development potential.

According to the International Energy Agency (IEA), Türkiye is expected to see around 64% growth in its renewable energy capacity to 90 GW over the next five years, of which almost 75% will come from solar and wind. This growth will allow it to rank fourth in Europe and among the ten largest renewable markets in the world.

Source: Daily Sabah, May 2, 2023

Russian Tatneft buys Turkish Aytemiz

The Russian Tatneft acquired 100% of the Turkish Aytemiz, a company specializing in the distribution and marketing of petroleum products, for a cost of 320 million USD.

Aytemiz has 10 fuel supply terminals in different regions of Türkiye and storage and filling terminals with a capacity of 250,000 m3. The Aytemiz brand currently serves 5.5 million drivers per month at more than 570 gas stations in 77 provinces across the country. Its 2022 turnover amounted to 1.5 billion USD.

50% of the shares of the Turkish company belonged to Doğan Holding, the remaining 50% to the Aytemiz family.

Tatneft is a major Russian oil company whose activities include production, refining, petrochemicals and fuel distribution. It is one of the world's leading companies active in the energy sector. It has an annual oil production capacity of more than 27 million tonnes, as well as a gas production volume of 885 million m3.

Source: Habertürk, April 5, 2023

Considerable rebound in tourism in 2022

As the effects of the pandemic dissipate, Turkish tourism is picking up. Tourism revenues soared 53.4% ​​in 2022 compared to 2021 to reach a record amount of nearly USD 46.3 billion while the number of foreign visitors jumped almost 80% compared to 2021 to reach 44.6 million, and almost catches up with the figures before the pandemic (45.1 million visitors in 2019).

Many #Russian tourists have spent their vacations in Türkiye, partly due to flight restrictions imposed by Western countries on Russia. German and British tourists also supported arrivals.

Despite the earthquakes that occurred in Türkiye in February, tourism continued to prosper and be an important element in the country's economy. In Q1 2023, revenue generated by tourism increased by 32.3% year-on-year to USD 8.7 billion according to TurkStat and more than 8 million visitors were welcomed to Türkiye, representing an increase of 26.8 % compared to Q1 2022.

The forecasts for this year are very optimistic: 60 million tourists are expected who should generate 56 billion USD in revenue. Tourism is expected to continue to grow in the medium term. According to experts, Türkiye is expected to welcome 90 million visitors in 2028 generating an income of 100 billion USD.

Tourism is a key sector of the Turkish economy. In addition to being an important source of foreign exchange, it contributes around 10% to the country's GDP and more than 1.7 million people work in accommodation and food services, representing roughly 5% of total employment. The most popular and loved regions are the Mediterranean and the Aegean Sea, which are known for their beaches, resorts and historical sites.

Source: Daily Sabah, April 28, 2023

Mega-project of fertilizer factories in Zonguldak

Fertilizer factories are planned to be built in the industrial zone of Filyos, a coastal town located in Zonguldak province in the Black Sea region of northern Türkiye. With a capacity of 1.8 million tonnes, the cost of building these facilities will require an investment of 31.5 billion TRY (≈ 1.5 billion EUR).

Once the sites are operational, installed fertilizer capacity in Türkiye will increase by 26% to more than 9 million tonnes and will meet a third of the country's fertilizer consumption. They will also help reduce import dependence as well as prices, with fertilizer being one of the largest input costs in Turkish agriculture.

Construction is expected to begin this year and is expected to be completed within 4 years.

This announcement comes as the country has just launched its first deliveries of Turkish gas to a newly built terminal in the same region at Filyos in Zonguldak province.

Source: Pusula Gazetesi, May 2, 2023

Canadian SSR Mining acquires 40% stake in the Hod Maden project

SSR Mining, a Canadian company specializing in mining exploration and exploitation, announced that it has acquired a 40% stake in the Hod Maden gold project in Türkiye for a total amount of USD 270 million. This acquisition is an important step for SSR Mining which hopes to strengthen its position in the region and continue to develop its long-term growth strategy.

Under development since 2018, the Hod Maden project, located in the Erzincan province in northeastern Türkiye, is one of the most promising mining projects in Türkiye. Indeed, with a lifespan of 13 years, it has a mineral reserve of 2 million ounces of gold and 255 million pounds of copper, making it one of the largest undeveloped gold and copper deposits in the world.

For SSR Mining, the transaction is expected to generate 80,000 ounces of gold equivalent annually and cash flows of around USD 66 million by 2024. This acquisition is also a positive sign for the Turkish mining sector which is seeking to attract more foreign investment to the country.

Source: Mining Technology, May 9, 2023

Alstom opens new engineering center in Istanbul

Alstom strengthens its presence in Türkiye by opening a new engineering center in Istanbul for the first time, in the Teknopark technology park. This center will be dedicated to the research and development of innovative mobility solutions, particularly concerning railway signaling. This is the first investment by a global railway company in Türkiye in engineering design and application.

The installation of this new center demonstrates Alstom's continued commitment to the Turkish market for more than 70 years and its desire to contribute to the development of the country's transport infrastructure. The engineering center will allow Alstom to work closely with its Turkish partners and develop solutions tailored to the specific needs of the local market. The center also aims to support projects outside Türkiye, particularly in Africa, the Middle East and Central Asia.

The engineering center will be equipped with cutting-edge technologies and will host a team of highly qualified engineers. It will play a key role in the development of sustainable products and solutions, with a focus on energy efficiency, connectivity and interoperability. The establishment of this new network strengthens the country's technological expertise in the railway sector and stimulates its industrial development. It also provides significant training and hiring opportunities for new talent.

Source: Alstom, May 8, 2023

New EU funding program

The Turkish government plans to make a new investment of around TRY 20 billion, or USD 1 billion, to revitalize production in rural areas, through a European Union (EU) pre-accession financing program, the IPARD program. III. As a candidate country, Türkiye is part of the IPARD program which supports the development of agriculture and rural areas.

This investment aims to create up to 30,000 new jobs. The objective of IPARD is to support preparation for harmonization with EU agricultural and rural development policies. As part of the IPARD I initiative, aimed at strengthening the competitiveness of the agricultural sector, more than EUR 1 billion had been allocated to 10,653 projects. The IPARD II program disbursed EUR 676 million for 11,022 projects.

The Ministry of Agriculture and Forestry is actively engaged in the preparatory work for the future IPARD III program, which is expected to start in the second half of this year and continue until 2027. The EU has planned a substantial contribution of 430 million EUR for this program, and the total budget amounts to 555 million EUR with commitments from the Ministry of Agriculture and Forestry. In addition, this program offers high subsidy rates, ranging from 50 to 75%, which constitutes a significant financial incentive for investors and helps reduce investment costs in order to improve the profitability of projects in the rural sector .

This new program presents a real opportunity for Türkiye to stimulate the rural economy, modernize agriculture and create new jobs.

Source: Daily Sabah, May 9, 2023

May 21: Türkiye celebrates World Tea Day

Considered the most consumed beverage in the world after water, tea is an integral part of Turkish culture. Consumed at breakfast, after meals, at home, as part of business relationships... black tea (çay) and is an essential symbol of Turkish hospitality. Beyond its health benefits, tea represents a significant economy for the country, around 800 million USD. Focus on the key figures on the occasion of World Tea Day (2022):

Leader in consumption: 1 Turk consumes around 1,300 cups of black tea per year, or 3.1 kg

1.5 million tonnes of tea leaves are harvested each year and processed in 216 processing factories

5th largest black tea producing country in the world with a production of around 280,000 tonnes per year. 70% of production is carried out in the Rize region alone

7th in the world in terms of cultivation area: 830,000 hectares of land – sometimes rising up to 1,000 meters above sea level mainly in the Black Sea region where more than 205,000 producers are involved

Production intended mainly for the local market with only 2% exported

The day of May 21 aims to raise awareness of the cultural and economic importance of tea. In Türkiye, many events are organized to celebrate it: tastings, conferences, workshops...