Geothermal Risk Sharing Mechanism for Turkey, Consultation Workshop, Jan 26, 2021
RSM workshop in Turkey 2019 (source: ISOR)
Alexander Richter
25 Jan 2021
The consortium managing the Geothermal Risk Sharing Mechanism will hold a Consultation Workshop for the opening the second tendering round on January 26, 2021.
On Tuesday 26 January from 10:30 am, a Consultation Workshop for opening the second tendering round of the Risk Sharing Mechanism (RSM) for Turkey with geothermal resource developers is going to be organized via an online ZOOM meeting. Simultaneous translations between Turkish and English will be provided. The question and answer (Q&A) sessions will be conducted in Turkish (with simultaneous English translations).
Background information and the meeting agenda can be downloaded from:
Please send an email to get registered to: 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 that can only be validated for power generation with high capital expenditures for drilling. MTA has limited its exploration and license tendering activities and private investors now have to finance 100% of the exploratory risk after acquiring rights to the license area. Moreover, similar to many other countries, commercial financing is generally not available in Turkey until the geothermal resource has been validated and construction of the power plant has commenced.
Therefore, 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 of the RSM will be provided by a contingent grant from the Climate Technology Fund (CTF) to the Government of Turkey. It is expected that a total of USD 39.8 million will be available for exploration drilling projects by the RSM. The implementing agency will be a dedicated unit (RSM Unit) within the Development and Investment Bank of Turkey (TKYB).
Within the scope of RSM, once the 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 $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 provided.
- 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 will 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 and institutions operating under the heading “Geothermal investment consultants, consultants, intermediaries, business follower, etc.”
Source: Turkey Geothermal Risk Sharing Mechanism Project
