How are expropriation disputes handled in Turkish energy projects? Learn the compensation rights of foreign investors and property owners concerning power plants, transmission lines, easements, valuation disputes and unlawful occupation.

Energy projects in Turkey frequently require large areas of land and extensive infrastructure. Solar power plants, wind farms, hydroelectric facilities, transmission lines, substations and other electricity projects may require the acquisition of privately owned land or the establishment of easement rights over third-party property.

For foreign investors, expropriation risk in Turkish energy projects can arise in two different ways. An investor developing or acquiring a power project may depend on expropriation procedures to secure land required for the project. Alternatively, a foreign investor or foreign-owned company may itself own property affected by an expropriation decision connected with another infrastructure or energy investment.

In both situations, compensation can become a major financial issue.

Under Article 46 of the Turkish Constitution, privately owned immovable property may be expropriated where required by public interest, subject to the procedures established by law and the constitutional protection concerning payment of the property’s actual value. The Constitutional Court has repeatedly emphasized the importance of actual compensation as a safeguard of the constitutional right to property. (worldlii.org)

For foreign investors, the central questions are therefore: Was the expropriation lawful? Has the property been correctly valued? Has the project caused a loss of value to the remaining property? And what remedies are available if the compensation is inadequate?

Why Expropriation Is Important for Energy Projects in Turkey

Energy infrastructure cannot always be developed exclusively on land voluntarily purchased from private owners.

A wind farm may require dozens of turbine sites and access routes. A solar project can require a large contiguous development area. Transmission lines may cross hundreds of separately owned parcels. Substations and connection infrastructure may require strategically located properties.

For electricity generation projects, Article 19 of Electricity Market Law No. 6446 provides a specific framework for obtaining immovable property required for licensed or pre-licensed generation activities. Requests concerning acquisition of necessary property are handled within the statutory framework, and relevant decisions can operate as public-interest decisions for expropriation purposes. (LEXPERA)

Accordingly, land acquisition should be considered a central development and investment issue rather than merely a real-estate formality.

Can Private Land Be Expropriated for an Energy Project?

Potentially yes.

The constitutional basis is public interest.

The Turkish Constitution permits the State and public legal entities to expropriate privately owned immovable property wholly or partially, or to establish administrative easements, where public interest requires it and the applicable legal procedure is followed. (worldlii.org)

Electricity infrastructure can fall within this framework.

However, the fact that an energy project serves a public-interest objective does not mean that the property owner loses the right to challenge the process or compensation.

Expropriation is a serious interference with property rights and must comply with constitutional and statutory safeguards.

Expropriation for Licensed Electricity Generation Projects

Electricity Market Law No. 6446 contains specific provisions concerning the acquisition of immovable property required for electricity generation.

For private-law legal entities holding a pre-license or generation license, procedures concerning property required for the licensed activity are conducted under Article 19 and Expropriation Law No. 2942. The relevant authority evaluates the property acquisition request and, where appropriate, a decision is adopted that also substitutes for a public-interest decision. (LEXPERA)

This means that foreign investors developing licensed projects should incorporate expropriation requirements into their development timetable.

An energy license alone does not automatically place every required parcel under the investor’s control.

Who Pays the Expropriation Cost?

This is particularly important for project economics.

Where property acquisition procedures are pursued for a private licensed generation project, the economic burden associated with obtaining the necessary property can ultimately form part of the project developer’s costs.

Accordingly, investors should include estimated expropriation compensation and associated property-acquisition expenses within the project’s development budget.

A project requiring extensive transmission corridors or numerous privately owned parcels can face substantially greater land-acquisition costs than initially expected.

Does the Energy Company Become Owner of the Expropriated Property?

Not necessarily.

The current Article 19 framework provides that ownership or limited real rights obtained through expropriation or transfer are registered in the name of the relevant public institution owning the generation facilities where applicable, and otherwise in the name of the Treasury. (LEXPERA)

This distinction is extremely important in acquisition due diligence.

A foreign investor purchasing a Turkish project company should not assume that every parcel described as “project land” is owned by the project company.

The legal basis for using each parcel should be independently verified.

Administrative Easement Instead of Full Expropriation

Not every energy project requires complete acquisition of a property.

For transmission lines, underground cables and similar infrastructure, an administrative easement may be sufficient.

This allows the relevant infrastructure to use or affect part of the property without necessarily transferring complete ownership.

However, an easement can substantially reduce the value and usability of the affected property.

The Constitution expressly recognizes the possibility of imposing administrative easements as part of the expropriation framework. (worldlii.org)

The compensation analysis should therefore consider the economic effect of the easement rather than merely the physical area occupied by infrastructure.

Transmission Lines and Loss of Property Value

Transmission-line disputes are among the most common examples of energy-related property interference.

A transmission line may occupy only a relatively small portion of a parcel but affect a considerably larger area because of safety requirements, building restrictions and practical limitations.

The property owner may therefore argue that compensation should reflect the reduction in value of the affected property, not merely the area physically occupied by pylons or other infrastructure.

The Constitutional Court has specifically considered disputes involving power transmission lines and emphasized the constitutional requirement that compensation correspond to the actual economic interference with property rights. (Anayasa Mahkemesi)

How Is Expropriation Compensation Determined?

Expropriation compensation is not simply whatever amount the administration initially offers.

The valuation process is governed by Expropriation Law No. 2942 and depends on the nature and characteristics of the property.

Factors relevant to valuation can include the property’s characteristics, location, use, income potential and other legally recognized valuation criteria.

Where the parties cannot agree on compensation, judicial proceedings can determine the appropriate amount.

The Constitutional Court has described the statutory process as involving a public-interest and expropriation decision, negotiations with the owner and, where agreement cannot be reached, proceedings before the civil courts for determination of compensation and registration. (Anayasa Mahkemesi)

Can the Property Owner Reject the Offered Compensation?

Yes.

The administration’s initial valuation does not necessarily represent the final compensation.

If the property owner believes that the amount offered does not reflect the property’s actual value, the compensation can become the subject of judicial determination within the applicable expropriation procedure.

For foreign-owned land, obtaining an independent valuation before accepting an offer can be particularly important.

An investor should not compare the offer only with the historical purchase price.

The legally relevant valuation may depend on the property’s current characteristics and applicable statutory valuation methodology.

Agricultural Land Valuation

Energy projects frequently affect agricultural property.

This is particularly common with solar facilities, wind projects and transmission lines.

Agricultural land valuation can involve considerations different from those applicable to ordinary urban development land.

Income-generating capacity, agricultural characteristics and the particular circumstances of the property can therefore become important in determining compensation.

Foreign investors owning agricultural land should obtain valuation analysis specifically designed for expropriation rather than relying solely on ordinary real-estate market reports.

Development Potential of Land

A major dispute can arise where the owner believes the land has development potential substantially exceeding its current use.

The relevant valuation rules must be applied carefully.

Speculative future expectations will not automatically produce compensation at the owner’s preferred value.

However, legally relevant characteristics affecting the property’s value should not simply be ignored.

The valuation evidence should therefore distinguish realistic, legally supportable value factors from purely speculative expectations.

Partial Expropriation

An administration may require only part of a property.

This creates an important question:

What happens to the value of the remaining land?

Suppose a transmission project takes a corridor through the center of an industrial parcel.

Only 15% of the land may be directly affected, but the remaining property may become significantly more difficult to develop.

Compensation analysis should therefore examine whether the partial expropriation causes a legally compensable reduction in the value or usability of the remainder.

Wind Farm Expropriation Issues

Wind projects can require land for:

Turbine Foundations → Access Roads → Crane Areas → Underground Cables → Substations → Transmission Infrastructure.

The expropriation footprint should therefore be analyzed across the entire project.

A foreign investor acquiring an existing wind farm should review whether every turbine and every critical access or infrastructure route has a secure property basis.

Incomplete property acquisition can create operational problems years after commissioning.

Solar Project Expropriation Issues

Large solar facilities can require substantial contiguous areas.

Land-acquisition difficulties may arise where a small number of strategically positioned parcels remain outside the developer’s control.

The investor should determine whether these parcels are actually necessary for the licensed project, transmission infrastructure, roads or future expansion.

Acquisition due diligence should identify every outstanding expropriation proceeding and its potential cost.

Hydroelectric Project Expropriation

Hydroelectric projects can involve particularly extensive property issues because dams, reservoirs, pipelines, access roads and associated infrastructure may affect large geographic areas.

The buyer should investigate completed and pending expropriation proceedings, compensation litigation and outstanding property-owner claims.

Historical disputes can remain economically significant long after the generation facility begins operation.

Expropriation and Project Acquisition Due Diligence

When acquiring an existing energy project, foreign investors should request a complete schedule of all land obtained through:

Purchase → Lease → Easement → Expropriation → Administrative Easement → Public Land Allocation → Other Usage Rights.

Every pending expropriation should also be identified.

The buyer should determine who bears outstanding compensation and litigation costs.

A project advertised as having “100% secured land” may still contain unresolved compensation proceedings.

Pending Compensation Lawsuits

The project company may already be involved in disputes concerning the amount paid for project land.

The buyer should investigate:

the number of pending cases,

amounts claimed,

amounts reserved,

valuation reports,

appeal status,

and possible aggregate exposure.

Ten relatively small land cases can collectively become a material acquisition liability.

Who Bears Additional Compensation After the Project Is Sold?

This is a major SPA issue.

Suppose expropriation occurred before the acquisition, but a court increases the compensation after closing.

Who bears the difference?

If the project company or project economics are exposed to the additional amount, the foreign buyer may effectively pay for a seller-period land acquisition.

The acquisition agreement should therefore allocate responsibility for historical expropriation compensation increases.

Expropriation Indemnity in the SPA

Where unresolved proceedings exist, the buyer may require a specific indemnity.

For example:

Seller shall bear agreed losses arising from additional expropriation compensation relating to proceedings initiated before closing.

The exact clause must be carefully drafted.

It should address compensation increases, interest, litigation expenses and other agreed costs.

Purchase Price Retention

Where substantial expropriation litigation remains unresolved, the buyer may retain part of the purchase price.

This can provide security if courts later increase compensation.

The retention amount can be linked to the aggregate estimated exposure identified during due diligence.

Escrow Protection

Escrow provides another option.

Part of the acquisition price can remain protected until specified expropriation cases are resolved.

This is particularly useful where the seller intends to distribute the sale proceeds immediately after closing.

A contractual indemnity against a seller with no remaining assets provides limited practical protection.

Confiscation Without Formal Expropriation

A particularly serious issue arises where public authorities use private property without completing the formal expropriation process.

Turkish constitutional jurisprudence recognizes this as a significant interference with the right to property.

The Constitutional Court has held that using property through confiscation without expropriation deprives the owner of the procedural safeguards guaranteed by Article 46. (Anayasa Mahkemesi)

This can arise in infrastructure contexts where transmission lines, roads or other public-service facilities occupy private property without the legally required expropriation process having been completed.

Compensation for Confiscation Without Expropriation

Property owners may have remedies where their property has effectively been appropriated or used without formal expropriation.

The Constitutional Court has repeatedly emphasized that public-interest objectives do not allow authorities simply to bypass constitutional expropriation guarantees. (Anayasa Mahkemesi)

The specific remedy and competent jurisdiction depend on the legal character and circumstances of the interference.

Foreign investors discovering infrastructure on their property without a proper legal basis should therefore obtain a detailed title, administrative and litigation analysis.

2025 Constitutional Court Development Relevant in 2026

Foreign investors should also be aware of an important recent Constitutional Court decision.

On January 16, 2025, the Constitutional Court annulled part of Additional Article 1 of Expropriation Law No. 2942 concerning property subjected to long-term restrictions through zoning plans. The Court emphasized that Article 46 requires actual compensation and rejected a framework that could effectively legitimize property interference without completing proper expropriation. The annulment was structured to take effect nine months after publication of the decision. (Anayasa Mahkemesi)

Accordingly, expropriation and property-right disputes reviewed in 2026 should be assessed under the current post-annulment legal position rather than relying mechanically on older explanations of the legislation.

Delayed Payment and Loss of Compensation Value

Delay can substantially reduce the real economic value of compensation, particularly during periods of inflation.

Constitutional protection therefore extends beyond merely determining a nominal compensation amount.

Recent Constitutional Court jurisprudence has emphasized that the actual-value guarantee under Article 46 must be respected and has scrutinized mechanisms that allow property ownership to pass before the full compensation is properly paid. (Anayasa Mahkemesi)

In 2024, the Constitutional Court also annulled a provision applying ordinary statutory interest to certain expropriation-related receivables because the Constitution requires the highest interest applicable to public claims in the relevant circumstances. (Anayasa Mahkemesi)

This is particularly important in long-running expropriation litigation.

Can Foreign Investors Challenge Expropriation in Turkey?

Foreign ownership does not mean that property can be taken without the protections applicable under Turkish expropriation law.

A foreign investor affected by expropriation may challenge relevant aspects of the process where the legal requirements for doing so exist.

Depending on the circumstances, disputes may concern:

Public Interest → Expropriation Procedure → Property Valuation → Easement Value → Partial Expropriation → Compensation → Unlawful Occupation → Delayed Payment.

Procedural deadlines can be critical.

An investor receiving an expropriation notice should therefore obtain legal advice immediately rather than waiting until the project physically enters the land.

International Investment Treaty Protection

Foreign investors may also ask whether an expropriation dispute can potentially engage an international investment treaty.

Turkey has bilateral investment treaties with numerous countries, but treaty protection depends on the investor’s nationality, corporate structure, applicable treaty, definition of protected investment and specific government measure involved.

Not every domestic expropriation dispute becomes an international investment arbitration.

However, where state measures substantially affect a qualifying foreign investment, treaty analysis can be appropriate in addition to domestic-law remedies.

The investment structure should therefore be examined before assuming that international arbitration is available.

Example: Transmission Line Across Foreign-Owned Industrial Land

A foreign company owns industrial land in Turkey.

A transmission line is constructed across part of the property.

The affected corridor prevents construction in an important section and materially reduces the development potential of the remaining parcel.

The investor should examine not only the physical area affected by the line but also whether the interference causes a compensable reduction in the overall property value.

Example: Foreign Investor Acquires Wind Farm With Pending Expropriation Cases

A foreign infrastructure fund acquires an operating wind farm.

Due diligence reveals 18 pending lawsuits concerning compensation for turbine access roads and transmission infrastructure.

The seller estimates total exposure at a relatively small amount.

The buyer’s independent valuation identifies materially greater potential compensation.

The investor may require a specific expropriation indemnity supported by escrow or purchase price retention.

Example: Energy Infrastructure Occupies Land Without Completed Expropriation

A foreign-owned company discovers that electricity infrastructure has occupied part of its property for years without a completed formal expropriation process.

The company should investigate whether the circumstances constitute confiscation without expropriation and determine the appropriate compensation and procedural remedies.

The Constitutional Court has recognized that such interference can violate the constitutional protection of property. (Anayasa Mahkemesi)

Major Expropriation Red Flags in Energy Project Acquisitions

Foreign buyers should investigate carefully where they discover unfinished expropriation proceedings, pending compensation lawsuits, disputed easement valuations, unpaid compensation, infrastructure outside secured project land, transmission lines without clear property rights, unresolved access-road acquisition, multiple pending landowner claims, inconsistent expropriation maps or seller resistance to disclosing historical land proceedings.

These matters should be quantified before the purchase price is finalized.

Energy Project Expropriation Due Diligence Checklist

A foreign investor acquiring a Turkish energy project should verify:

Project Land → Expropriation Decisions → Public Interest Decisions → Administrative Easements → Compensation Paid → Pending Compensation → Court Cases → Valuation Reports → Transmission Corridors → Access Roads → Turbine Parcels → Substations → Remaining Land Value Claims → Interest Exposure → Confiscation Without Expropriation Claims → SPA Warranties → Specific Indemnities → Escrow → Purchase Price Retention.

The land schedule should correspond with the project’s technical layout.

A legal map showing secured property rights should therefore be compared with the physical infrastructure actually operating on the site.

Frequently Asked Questions

1. Can private land be expropriated for an energy project in Turkey?

Yes, where the applicable public-interest and statutory requirements are satisfied. The Constitution nevertheless protects the owner’s right to actual compensation. (worldlii.org)

2. Can a foreign property owner receive expropriation compensation?

Foreign ownership does not remove the property protections applicable under Turkish expropriation law.

3. Must the property owner accept the administration’s first valuation?

Not necessarily. Where agreement cannot be reached, compensation can be determined through the applicable judicial procedure.

4. Can an easement create a right to compensation?

Yes. An administrative easement affecting the use and value of property can form part of the expropriation compensation analysis.

5. Can compensation include loss in value of remaining property?

Depending on the circumstances and applicable valuation rules, the effect of partial expropriation or an easement on the remaining property can be relevant.

6. What happens if electricity infrastructure occupies land without formal expropriation?

The circumstances may potentially constitute confiscation without expropriation and give rise to legal remedies. (Anayasa Mahkemesi)

7. Can a foreign investor buying a power plant inherit pending expropriation disputes?

Economically, yes. If unresolved project liabilities remain after a share acquisition, they can affect the acquired company and investment.

8. Can the seller indemnify the buyer against pending expropriation cases?

Yes. Specific indemnities, escrow and purchase price retention can be negotiated to allocate identified historical exposure.

9. Can a foreign investor use international arbitration against Turkey?

Potentially, but only where the investor and investment qualify under an applicable investment treaty and the relevant requirements are satisfied. Domestic expropriation disputes do not automatically create treaty claims.

10. What should an investor check before acquiring an energy project with expropriated land?

The buyer should verify the legal basis of every property right, completed and pending proceedings, compensation already paid, outstanding litigation, potential increases and who bears those costs under the acquisition agreement.

Legal Support for Energy Project Expropriation Disputes in Turkey

Expropriation risk should be examined from both sides of an energy investment. Developers must ensure that the project has legally secure access to every parcel required for generation and transmission, while foreign property owners must ensure that compulsory acquisition does not deprive them of the compensation and procedural protections available under Turkish law.

Firat Fesih Kaya Law Office assists foreign investors, international energy companies and property owners with energy-project acquisitions and expropriation disputes in Turkey. Firat Fesih Kaya can assist with expropriation compensation disputes, administrative easements, transmission-line claims, confiscation without expropriation, energy-project land due diligence, SPA risk allocation and disputes concerning historical project land acquisition.

For an investor acquiring an existing project, the central question is straightforward: has every parcel required by the project been legally secured, has the correct compensation been paid or reserved, and who bears the cost if historical expropriation claims increase after closing?

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