EOI – Turkey Geothermal Risk Sharing Mechanism – Call open until Friday, March 5, 2021
A call for Expressions of Interest has been issued under the Geothermal Risk Sharing Mechanism has been issued open for geothermal developers in Turkey. Deadline is Friday, March 5, 2021.
Geothermal project developers are now invited to prepare and submit an Expressions of Interest (EoI) for the second round of the Risk Sharing Mechanism (RSM) for geothermal resource validation. The deadline to submit EoIs is Friday, March 5, 2021. The Call for EoI, the EoI Template and the TKYB Application Form can be downloaded here.
The Application Form must be submitted through the website.
Presentations from the January 26, 2021 Consultation Workshop can be downloaded at: https://rpmjeoturkiye.com/en/consultation-workshop-rsm-round-2/
For any questions on the RSM application process, please contact: Lise dot RSMproject at gmail dot com
Geothermal Investments Safer Now with Risk Sharing Mechanism
Geothermal exploration and development is a high-risk investment because of the uncertainty associated with a natural resource whose feasibly to be exploited, for power generation and/or for direct use applications, can only be validated after significant capital expenditures in exploration drilling. With public support programs for geothermal exploration no longer available, private investors have to assume 100% of the exploratory risk after acquiring the rights to a particular license area. Moreover, like in most other countries, commercial financing is generally not available in Turkey until the geothermal resource has been fully validated and construction of the power plant has commenced.
The objective of the RSM project is to increase private sector investment in geothermal exploration drilling in Turkey by providing partial coverage of exploration drilling costs in case of unsuccessful wells. Funding for the RSM is provided by a contingent grant from the Clean Technology Fund (CTF), provided through the World Bank, to the Government of Turkey. US$ 37 million will be available for exploration drilling projects under the RSM.
The implementing agency is the Development and Investment Bank of Turkey (TKYB).
Within the scope of RSM, once a Beneficiary is successfully enrolled in the program:
- 40% to 60% of the cost of failed wells will be paid by the RSM to the Beneficiary, up to a total of US$ 4 million under a scheduled program.
- If two wells in a three well program are unsuccessful, the contract between the RSM and the Beneficiary is automatically terminated.
- Higher coverage will be given for wells outside the Aydin, Denizli and Manisa, where geothermal exploration is less advanced.
- A success fee, amounting to 5% of the estimated well cost, is either paid upfront by the Beneficiary to the RSM or a letter of guarantee is required.
- When a completed well meets or exceeds the success criteria that has been set on a custom basis for the drilling program, the success fee is retained by the RSM, but otherwise it is reimbursed to the Beneficiary
Important Note for Investors
Applications within the scope of the Risk Sharing Mechanism have to be made directly by investors or employees who are authorized by the investor company. For this reason, please do not make applications to the Risk Sharing Mechanism as persons or institutions operating under the heading “Geothermal investment consultants, consultants, intermediaries, business follower, etc.”