Planning to acquire an existing power plant in Turkey? Discover 30 critical legal risks involving EMRA licensing, share transfers, grid connection, YEKDEM, land rights, environmental permits, project finance, tax liabilities and hidden regulatory problems.

Acquiring an operating power plant in Turkey can be considerably faster than developing a greenfield energy project. The investor purchases an existing generation business with established land rights, grid infrastructure, regulatory approvals, equipment, operating history and potentially predictable cash flow.

But buying an operating power plant also means buying its history.

A foreign investor may acquire not only turbines, solar panels, wind turbines or generation rights but also undisclosed regulatory violations, defective land rights, environmental liabilities, shareholder disputes, tax exposures, grid problems, litigation, financing restrictions and contractual obligations accumulated over many years.

Turkey’s electricity generation market is regulated principally under Electricity Market Law No. 6446 and the electricity-market regulations administered by the Energy Market Regulatory Authority (“EMRA”). EMRA confirms that electricity generation generally requires a generation license and that the licensing process and continuing obligations are governed by the Electricity Market Licensing Regulation. (EPDK)

For a foreign investor, therefore, conventional corporate due diligence is not enough.

A power plant acquisition requires simultaneous corporate, regulatory, energy, real estate, environmental, financial, technical, competition and litigation due diligence.

Here are 30 of the most important legal risks.

1. Acquiring the Company Without Properly Reviewing the Generation License

The generation license should be one of the first documents reviewed.

Do not rely solely on the seller’s statement that the plant is “fully licensed.”

The investor should examine the license itself and compare it against the plant’s actual configuration, installed capacity, generation source, site and operational status.

EMRA describes a generation license as the authorization allowing a legal entity to conduct electricity generation activities under Law No. 6446. (EPDK)

Any discrepancy between the license and the physical plant requires investigation before closing.

2. Assuming the License Can Simply Be Transferred

Foreign investors frequently conceptualize an acquisition as:

“We are buying the power plant and its license.”

Legally, the transaction may be considerably more complicated.

The investor needs to distinguish between acquiring shares in the existing licensed company and structuring an asset or business transfer.

Energy licenses are regulatory authorizations held by specific legal entities. Transaction structure therefore has major consequences.

The SPA should never be signed on the assumption that an electricity generation license behaves like an ordinary transferable commercial asset.

3. EMRA Approval or Regulatory Notification Requirements

Changes in ownership and control of licensed energy companies can trigger regulatory requirements.

The transaction structure, percentage acquired, resulting control and corporate changes must therefore be reviewed under the electricity-market legislation before closing.

This is particularly important where an investor intends to acquire the project indirectly through a holding company.

The acquisition timetable should incorporate any required regulatory approvals rather than treating them as post-closing housekeeping.

4. Buying a Plant With Historical EMRA Violations

A share acquisition normally means purchasing the company that already operated the facility.

Its historical regulatory record remains relevant.

Due diligence should investigate previous:

warnings,

administrative investigations,

regulatory correspondence,

reporting failures,

license violations,

administrative fines,

and pending proceedings.

EMRA reiterated in June 2026 that licensed generation companies subject to progress-report obligations can face sanctions under Article 16 of Law No. 6446 for regulatory non-compliance. (EPDK)

An investor should therefore inspect the company’s complete regulatory correspondence, not merely its current license.

5. License Amendment Problems

The physical facility may have changed since the original license was issued.

There may have been:

capacity increases,

additional units,

hybrid generation components,

storage integration,

or other technical modifications.

Determine whether every material change was properly reflected in the license.

A profitable-looking plant may conceal an unresolved regulatory discrepancy between its actual configuration and licensed configuration.

6. Grid Connection Problems

A generation license does not eliminate grid risk.

Review the connection agreement and system-use arrangements and investigate:

connection capacity,

connection point,

technical obligations,

curtailment issues,

outstanding payments,

grid investments,

and historical disputes.

The value of a generation facility depends heavily on its ability to deliver electricity to the system.

7. Grid Capacity Does Not Match the Investment Model

Suppose the investor values a solar facility assuming it can produce and inject electricity at a particular capacity.

The plant may physically possess that generation capability.

But the relevant grid and licensing arrangements may restrict what can actually be injected.

Financial models must therefore be reconciled with regulatory and grid documentation.

8. YEKDEM Revenue Assumptions Are Wrong

For renewable projects, YEKDEM status can materially affect valuation.

Do not assume that historical participation guarantees future participation on identical terms.

EMRA confirms that participation is application-based and subject to the applicable renewable-support legislation. For 2026, licensed generators wishing to participate were required to submit their applications within the applicable deadline, and EMRA subsequently published the final 2026 YEK list. (EPDK)

The buyer should verify the project’s actual support status rather than relying on the seller’s financial model.

9. YEKDEM Eligibility Period Is Nearly Over

A plant can appear highly profitable because historical accounts reflect support revenues.

But if the relevant support period is close to expiry, future cash flow may look very different.

The acquisition model should distinguish between:

historical revenue

and

legally sustainable future revenue.

A sophisticated SPA should also address seller representations concerning support eligibility.

10. Land Ownership Problems

A power plant cannot be evaluated independently from the land beneath it.

The investor should determine whether the facility stands on:

privately owned land,

leased property,

public land,

or property subject to special rights.

Title records should be independently reviewed.

Do not accept a spreadsheet stating “land rights secured.”

Verify every relevant parcel.

11. Defective Lease Agreements

Renewable plants frequently rely on long-term leases.

Review:

lease duration,

renewal,

termination,

assignment,

change-of-control provisions,

rent escalation,

registration,

and default rights.

If the remaining lease term is substantially shorter than the expected economic life of the project, valuation can be materially affected.

12. Missing Rights for Transmission Lines and Access Roads

Owning or leasing the generation site itself may not be enough.

The project may depend on:

transmission lines,

access roads,

cables,

transformer areas,

substations,

and other infrastructure crossing third-party property.

Verify easements and other rights separately.

A plant that cannot legally access critical infrastructure contains a major hidden risk.

13. Expropriation Problems

Some energy projects rely on expropriation or public-law mechanisms concerning project land and transmission infrastructure.

The buyer should determine whether relevant procedures were completed and whether litigation remains pending.

Landowners may have disputes concerning compensation or legality.

These should be identified before acquisition.

14. Zoning and Construction Problems

A generation license does not automatically cure construction-law problems.

Review relevant zoning status, construction permits, occupancy or operating documentation where applicable and other local approvals.

Unauthorized structures can create exposure even where electricity generation itself is licensed.

15. Environmental Impact Assessment Problems

Environmental compliance should be treated as a standalone due diligence workstream.

Depending on the project, environmental impact assessment requirements and other environmental permissions may be crucial.

The buyer should review not merely whether an environmental document exists but whether the project actually constructed and operated corresponds to what was approved.

Capacity expansions are particularly important.

16. Historical Environmental Liability

Environmental problems do not disappear merely because ownership changes.

Potential issues include:

soil contamination,

groundwater contamination,

waste-management failures,

oil leakage,

emissions,

hazardous substances,

and rehabilitation obligations.

This risk can be particularly significant for thermal generation facilities and older industrial sites.

17. Environmental Litigation

Local residents, municipalities, NGOs or landowners may have challenged permits or administrative decisions.

The investor should search for pending and historical administrative proceedings.

A project may be operating today while a lawsuit challenging a fundamental permit remains unresolved.

That litigation belongs in the valuation model.

18. Competition Authority Approval

Larger acquisitions may require Turkish merger-control analysis.

Do not wait until immediately before closing.

The Turkish Competition Authority continues to review acquisitions and changes of control in 2026, including transactions involving energy-sector businesses. For example, in April 2026 it approved a transaction concerning interests in a geothermal energy company. (Rekabet Kurumu)

Whether notification is required depends on the applicable merger-control rules, turnover thresholds and transaction structure.

Competition clearance should therefore be assessed early and, where required, made a condition precedent.

19. Change-of-Control Clauses in Financing Agreements

Many operating plants remain project-financed.

The financing documents may prohibit a shareholder change without lender consent.

Review:

facility agreements,

security agreements,

share pledges,

mortgages,

account pledges,

assignment arrangements,

and sponsor-support obligations.

Closing without required lender consent can trigger default.

20. Hidden Bank Security

A seller may say:

“The plant debt will be repaid at closing.”

That statement is not enough.

Determine exactly what security exists over:

shares,

land,

equipment,

receivables,

bank accounts,

insurance proceeds,

and contractual rights.

The closing mechanics should ensure that repayment and release of security occur correctly.

21. Share Pledges

The shares being purchased may themselves be pledged.

The buyer should verify the corporate share records and financing documentation.

A share purchase should not close until the agreed release mechanics are legally effective.

22. Tax Liabilities

In a share acquisition, historical tax exposure remains inside the target company.

Due diligence should investigate:

corporate tax,

VAT,

withholding,

stamp tax,

property-related taxes,

payroll obligations,

and pending tax audits.

Special attention should be paid to related-party arrangements.

23. Related-Party Contracts

Energy projects are often developed within corporate groups.

The target may therefore purchase services from affiliates for:

management,

maintenance,

engineering,

land use,

financing,

or procurement.

These agreements may not be arm’s-length.

After acquisition, the seller’s group may terminate them.

The buyer should identify which arrangements are genuinely necessary for continued operation.

24. EPC Warranty Has Expired or Is Unenforceable

Technical due diligence may reveal equipment problems, but legal due diligence should determine who must pay for them.

Review:

EPC warranties,

performance guarantees,

defect periods,

liquidated damages,

manufacturer warranties,

and security instruments.

A defect worth EUR 5 million is substantially more serious if every contractor warranty has already expired.

25. O&M Agreement Creates Long-Term Exposure

An operating plant may be locked into an expensive operation and maintenance agreement.

Review:

term,

fees,

indexation,

performance standards,

termination rights,

change-of-control provisions,

and liability caps.

A favorable acquisition price can be offset by an unfavorable ten-year O&M commitment.

26. Equipment Ownership Is Unclear

Do not assume every turbine, transformer, inverter or battery physically located at the site belongs to the target company.

Some equipment may be:

leased,

financed,

owned by contractors,

or subject to security rights.

Prepare a legally verified asset register.

For solar facilities, reconcile equipment records against actual panels, inverters and transformers.

27. Power Sale and Trading Contracts

The buyer needs to understand how electricity is monetized.

Review:

bilateral electricity sale agreements,

trading agreements,

balancing arrangements,

renewable-support participation,

and any corporate power purchase arrangements.

Long-term contracts can be valuable assets or significant liabilities depending on price and termination provisions.

28. Pending Litigation and Arbitration

The target company may be involved in disputes with:

EPC contractors,

O&M contractors,

landowners,

equipment suppliers,

grid entities,

employees,

shareholders,

banks,

or public authorities.

Request the complete litigation and arbitration schedule.

Then independently test whether it is complete.

The seller should provide warranties concerning undisclosed disputes and threatened claims.

29. Employee and Management Liabilities

The acquisition may involve key technical personnel essential to continued operations.

Review employment contracts, accumulated employee entitlements, management agreements and potential termination liabilities.

Also identify whether important permits, operational knowledge or electronic systems depend on individuals employed by the seller’s wider group rather than the target.

30. The SPA Does Not Protect the Foreign Buyer

This is often the most important legal risk.

Excellent due diligence does not eliminate every unknown problem.

The Share Purchase Agreement must allocate residual risk.

The buyer should consider appropriate:

representations and warranties, indemnities, disclosure mechanisms, conditions precedent, price adjustments, escrow arrangements, holdbacks, liability provisions and post-closing cooperation obligations.

Energy-specific warranties should address matters such as:

generation license validity,

regulatory compliance,

grid rights,

YEKDEM status,

land rights,

environmental compliance,

permits,

litigation,

project contracts,

financing,

and tax liabilities.

Generic corporate warranties are rarely sufficient for a significant power plant acquisition.

Share Deal or Asset Deal?

Transaction structure fundamentally affects risk.

In a share acquisition, the investor acquires shares in the existing project company.

The legal entity continues to exist.

Its assets remain with it, but so do many of its historical liabilities.

This is why share deals require particularly extensive due diligence.

An asset acquisition can isolate some historical corporate risks, but transferring the operational structure of a regulated energy project can create substantially more complex licensing, contractual, financing, land and regulatory issues.

The optimal structure should therefore be determined before negotiating the definitive acquisition documents.

Why Foreign Investors Should Conduct Regulatory Due Diligence Separately

Ordinary M&A due diligence may confirm:

the company exists,

shares are valid,

contracts exist,

and litigation has been disclosed.

That still does not answer the core energy question:

Can this plant legally continue generating and selling electricity after closing on the assumptions used to calculate the purchase price?

That question requires energy regulatory due diligence.

EMRA’s current licensing guidance confirms that electricity-market generation activity is tied to the licensed legal entity and facility-specific regulatory framework. (EPDK)

The Financial Model Must Be Legally Verified

Suppose the seller presents a valuation showing EUR 15 million annual EBITDA.

Counsel should investigate the legal assumptions underneath that figure.

How much depends on renewable support?

When does support expire?

Is the grid capacity legally secured?

Is the land available throughout the model period?

Are electricity-sale arrangements terminable?

Will financing need to be refinanced after the change of control?

Are environmental investments required?

Are major EPC warranties expiring?

Legal due diligence should therefore test the financial model rather than exist separately from it.

Red Flags That Should Delay Closing

Certain discoveries justify slowing down the transaction.

Examples include a threatened generation-license issue, unresolved ownership of project land, material discrepancy between licensed and actual capacity, pending cancellation proceedings concerning essential permits, undisclosed regulatory investigations, missing lender consent, uncertain YEKDEM assumptions or substantial undisclosed litigation.

The buyer should not accept:

“We will fix it after closing”

without understanding whether it can actually be fixed.

Foreign Investor Due Diligence Checklist

Before signing or closing, the investor should have a verified picture of the target’s corporate ownership, generation license, EMRA history, grid arrangements, YEKDEM status, land rights, environmental permissions, construction status, financing, security interests, EPC and O&M contracts, electricity-sale arrangements, insurance, tax exposure, employees and disputes.

The transaction should also be screened for Turkish merger-control requirements. Recent Competition Board decisions confirm that changes of control continue to undergo review under Turkey’s merger-control regime in 2026. (Rekabet Kurumu)

Frequently Asked Questions

Can a foreign investor buy an existing power plant in Turkey?

Yes, subject to the applicable investment, corporate, energy regulatory, competition and transaction-specific requirements.

Is buying the shares the same as transferring the generation license?

No. A share acquisition and a direct transfer of regulated assets or activities are legally different structures. The licensing consequences should be analyzed before selecting the transaction structure.

Should EMRA issues be checked before signing the SPA?

Yes. The generation license and regulatory history are fundamental elements of the target’s value.

Does an operating power plant still require regulatory due diligence?

Absolutely. Existing plants can carry historical licensing, reporting, compliance and administrative exposure.

How can a foreign investor verify YEKDEM status?

The applicable EMRA records and support documentation should be reviewed. EMRA publishes the relevant annual lists; the final 2026 YEK list was approved by Board decision dated 30 December 2025. (EPDK)

Is land due diligence necessary if the company already operates the plant?

Yes. The buyer should independently verify title, leases, easements, access and other rights necessary for continued operation.

Can the acquisition require Competition Authority approval?

Potentially. The transaction should be tested against the applicable Turkish merger-control requirements and thresholds.

What happens to historical liabilities in a share acquisition?

Because the target company continues to exist, historical corporate liabilities generally remain within it. Due diligence, warranties and indemnities are therefore particularly important.

Should lenders approve the acquisition?

If financing documents contain change-of-control restrictions or other consent requirements, lender approval may be required before closing.

What is the biggest mistake foreign buyers make?

Focusing on the physical plant and purchase price while failing to verify the regulatory, land, grid and contractual rights that actually generate its economic value.

Energy M&A Lawyer in Turkey for Foreign Investors

Acquiring an existing Turkish power plant should be treated as the acquisition of a regulated operating business, not simply the purchase of physical generation equipment.

The investor needs to establish whether the plant can continue operating lawfully, whether its projected revenues are sustainable, whether its land and grid rights remain secure and whether historical liabilities can materially reduce its value.

This is particularly important in 2026 because regulatory obligations continue after a license has been obtained. EMRA’s June 2026 announcement, for example, reiterated continuing reporting requirements for certain licensed generation companies and expressly warned that non-compliance may result in sanctions under Law No. 6446. (EPDK)

The acquisition process should therefore combine legal due diligence, energy regulatory due diligence, technical due diligence, tax review and financial due diligence, followed by an SPA specifically drafted for the project’s identified risks.

For foreign investors, the central objective is not merely to acquire the shares.

It is to ensure that the investor acquires a power plant whose license, grid access, land rights, revenue structure, permits and key contracts remain legally sustainable after closing.

Fırat Fesih Kaya Law Office assists foreign investors, international energy companies, investment funds and project sponsors with power plant acquisitions in Turkey, energy M&A, legal due diligence, EMRA licensing, renewable energy investments, solar and wind power plant acquisitions, YEKDEM analysis, project finance, land and permit due diligence, SPA negotiations, regulatory approvals and post-closing energy compliance.

Phone: +90 312 434 22 22
Mobile: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No: 221, Yıldırım Tower, Balgat, Çankaya, Ankara, Turkey