Learn when Turkish energy contracts may be denominated and paid in foreign currency. This 2026 guide covers EPC contracts, equipment sales, PPAs, O&M agreements, foreign-owned companies, project finance, exchange-rate clauses and legal risks.

Foreign currency clauses are commercially important in Turkish energy projects because equipment, financing and technical services are frequently priced in US dollars or euros. Solar modules, wind turbines, inverters, battery systems, transformers and specialist engineering services may all involve significant foreign-currency costs.

However, parties cannot assume that every Turkish energy contract may automatically be denominated and paid in foreign currency. The applicable position depends on the parties’ residency, the legal classification of the contract, the identity of the parties and the exemptions contained in Turkey’s foreign exchange legislation.

The principal framework is established by Decree No. 32 on the Protection of the Value of Turkish Currency and Communiqué No. 2008-32/34. Certain contracts between persons resident in Turkey cannot be denominated in or indexed to foreign currency unless a statutory exception applies. The contract must therefore be classified correctly before the price, invoice and payment mechanism are agreed. (HMB)

This guide explains the principal rules affecting EPC contracts, equipment sales, PPAs, O&M services, leases and financing arrangements in Turkish energy projects.

Why Contract Classification Matters

The foreign currency rules differ according to whether the agreement is legally characterized as:

• A movable property sale.
• A construction or works contract.
• A service contract.
• A lease.
• An employment contract.
• A real estate contract.
• A financial leasing agreement.
• A mixed contract.

The title chosen by the parties is not decisive. Authorities and courts may examine the agreement’s real purpose and dominant obligations.

For example, a contract described as an “EPC supply agreement” may contain equipment sales, engineering, construction, commissioning and maintenance obligations. If the agreement is treated as a mixed contract, the foreign currency eligibility of every major component must be examined carefully.

Movable Equipment Sales

Since the amendment published on 6 March 2025, persons resident in Turkey may generally denominate movable property sale contracts in foreign currency or index them to foreign currency, except for vehicle sales.

This rule is highly relevant to the sale of:

• Solar panels.
• Wind turbine components.
• Inverters.
• Transformers.
• Battery systems.
• Switchgear.
• Cables.
• Charging equipment.
• Spare parts.

The current Communiqué permits foreign currency pricing for movable property sales other than vehicle sales. The Ministry’s guidance also confirms that unpaid invoices and agreements predating the 6 March 2025 amendment may be settled in Turkish lira or foreign currency if the parties agree. (HMB)

Accordingly, two Turkish-resident energy companies may generally agree that imported or locally manufactured energy equipment will be priced and paid for in euros or US dollars, provided the transaction is genuinely a movable property sale and no other restriction applies.

EPC and Construction Contracts

EPC agreements are often treated as works contracts because the contractor undertakes to deliver a completed facility rather than merely sell equipment.

Under the current Communiqué, Turkish residents may denominate a works contract in foreign currency where the contract contains foreign-currency costs. There is no prescribed minimum percentage for the foreign-currency cost. (HMB)

This may support foreign currency pricing in projects involving:

• Imported solar modules.
• Foreign-manufactured turbines.
• Overseas engineering.
• Imported battery systems.
• Foreign software licenses.
• International transportation.
• Specialist foreign subcontractors.

The agreement should identify and document the foreign-currency cost elements. Procurement schedules, supplier quotations, customs records and financing documents may help demonstrate the commercial basis for the foreign currency clause.

Mixed EPC Contracts

Mixed agreements create the greatest legal uncertainty.

The Ministry’s guidance states that a mixed contract is exempt only where all of its constituent contract types fall within an exemption. If one component is not eligible, the entire agreement may need to be denominated in Turkish lira.

Energy developers should therefore avoid combining unrelated obligations without legal review. It may sometimes be safer to use separate agreements for:

• Equipment supply.
• Construction.
• Engineering.
• Software licensing.
• O&M services.
• Land leasing.

Contract separation must reflect genuine commercial arrangements and should not be used merely to disguise the real legal character of a transaction.

O&M and Consultancy Agreements

O&M, consultancy, project management and technical support agreements are generally service contracts.

As a rule, service contracts between Turkish residents cannot be denominated in or indexed to foreign currency unless a specific exemption applies. Recognized exemptions include certain services involving foreign nationals, exports or foreign-currency-earning activities, activities performed abroad and cross-border transportation. (HMB)

A domestic O&M agreement between two ordinary Turkish companies may therefore need to be priced in Turkish lira, even if the underlying power plant earns revenue linked to market prices.

The agreement should be reviewed separately rather than assuming that the foreign currency eligibility of the EPC contract automatically extends to the O&M contract.

Foreign-Owned Turkish Companies

An important exemption applies to Turkish companies that are at least 50% directly or indirectly owned, jointly controlled or controlled by persons resident abroad.

Where such a company acts as the employer or recipient of services, employment and service contracts may be denominated in or indexed to foreign currency. (HMB)

This exception may be relevant where a foreign-owned Turkish project company appoints:

• An O&M contractor.
• A technical consultant.
• A project manager.
• An engineering adviser.
• A software service provider.

The exact shareholding and control structure should be documented. A small foreign minority shareholding without control may not be sufficient.

Power Purchase Agreements

The currency treatment of a PPA depends on its structure.

A physical electricity sale may be characterized differently from a service agreement, financial settlement contract or broader energy-management arrangement. The parties should assess:

• Whether electricity is treated as movable property for the relevant transaction.
• Whether the agreement contains balancing or service elements.
• Whether both parties are Turkish residents.
• Whether a foreign-owned-company exemption applies.
• Whether the transaction is connected with exports or foreign-currency-earning activities.
• Whether payment is physical, financial or indexed.

A generic PPA template should not be used without a contract-specific foreign exchange analysis.

Real Estate and Land Contracts

Where a project company leases or purchases land in Turkey from another Turkish resident, the agreement generally cannot be denominated in or indexed to foreign currency.

This restriction applies to domestic real estate sales and leases, including workplaces and other immovable property, unless a specific exemption applies. One exemption allows foreign nationals resident in Turkey and qualifying foreign-controlled companies to enter into foreign currency real estate contracts when they act as buyer or tenant. (HMB)

Energy projects should separately review:

• Site leases.
• Rooftop leases.
• Warehouse leases.
• Office leases.
• Easement arrangements.
• Surface rights.

A foreign currency EPC contract does not automatically justify a foreign currency land lease.

Financing and Financial Leasing

Project loans and financial leasing agreements are subject to separate rules under Decree No. 32.

Certain financial leasing agreements permitted under Articles 17 and 17/A of the Decree may be denominated in foreign currency. Capital markets transactions may also be denominated in foreign currency where the relevant legal conditions are satisfied. (HMB)

Foreign investors should distinguish between:

• Foreign currency pricing in a commercial contract.
• Foreign currency borrowing.
• Shareholder loans.
• Equipment leasing.
• Bond issuance.
• Bank financing.

Permission to price a contract in euros does not necessarily mean that the company may freely obtain a foreign currency loan under the same conditions.

Public Energy Projects

Broader exemptions may apply where contracts are connected with public-sector projects, foreign currency tenders or international agreements.

The Communiqué permits foreign currency clauses in certain agreements entered into within projects involving public authorities, including contracts between project contractors and third parties, excluding specified real estate and employment contracts. (HMB)

The connection with the qualifying public project should be expressly documented.

Exchange-Rate Clauses

Where payment is made in Turkish lira under a contract that may lawfully be denominated in foreign currency, the parties may agree on the exchange rate to be used.

The Ministry confirms that foreign exchange legislation does not prescribe a mandatory conversion rate in such circumstances. The parties may therefore select:

• Central Bank buying rate.
• Central Bank selling rate.
• A specified commercial bank rate.
• The invoice-date rate.
• The payment-date rate.
• A monthly average rate.

The contract should define the source, date and time of the rate. Expressions such as “current exchange rate” are likely to produce disputes.

Recommended Contract Clauses

A Turkish energy agreement involving foreign currency should clearly address:

1. Contract classification.
2. Legal basis for foreign currency use.
3. Payment currency.
4. Alternative Turkish lira payment.
5. Exchange-rate source.
6. Conversion date.
7. Banking charges.
8. Withholding taxes.
9. Currency transfer restrictions.
10. Exchange-rate disruption.
11. Change in law.
12. Invoice requirements.
13. Late-payment interest.
14. Payment security.
15. Required regulatory cooperation.

The parties should also include a severability or adjustment mechanism in case a currency clause later becomes unlawful.

Common Legal Mistakes

Energy companies frequently:

• Assume imported equipment makes every project contract foreign-currency eligible.
• Treat EPC and O&M agreements identically.
• Ignore mixed-contract rules.
• Use vague exchange-rate wording.
• Forget land and real estate restrictions.
• Rely only on a foreign shareholder’s presence without checking the 50% ownership or control test.
• Confuse foreign currency pricing with foreign currency borrowing.
• Fail to revise old templates after the 2025 amendment.
• Issue invoices that contradict the contract.
• Ignore tax and accounting implications.

Frequently Asked Questions

1. Can solar panels be sold in euros between Turkish companies?

Generally, yes. Movable property sales other than vehicle sales may currently be denominated in or indexed to foreign currency. (HMB)

2. Can an EPC contract be priced in US dollars?

Potentially, yes, where it qualifies as a works contract containing foreign-currency costs. The agreement and supporting records should document those costs.

3. Can an O&M agreement be paid in euros?

Not automatically. Domestic service contracts are generally restricted unless a specific exemption, such as qualifying foreign ownership or an export-related service, applies.

4. Can the parties pay in Turkish lira despite a euro-denominated contract?

Yes, where they agree. They should also specify the conversion rate and conversion date.

5. Can a land lease for a solar project be denominated in dollars?

Generally not between ordinary Turkish residents unless a specific real estate exception applies.

6. Does foreign ownership automatically permit every foreign currency contract?

No. The applicable exemption depends on the ownership or control threshold, the company’s role and the contract type.

7. Are foreign currency loans governed by the same rules?

No. Foreign currency borrowing is subject to separate provisions under Decree No. 32.

8. Why should energy companies obtain legal review?

A Turkish energy lawyer can classify the contract, identify the applicable exemption, coordinate invoices and payment clauses, review foreign ownership conditions and reduce the risk of invalid or unenforceable currency provisions.

Legal Support – Contact Our Energy Lawyers

Foreign currency clauses can protect project economics, but only when they comply with Turkish exchange-control legislation and accurately reflect the contract’s legal nature.

Fırat Fesih Kaya and our legal team advise foreign investors, renewable energy developers, EPC contractors, infrastructure funds, equipment suppliers, lenders and multinational companies on foreign currency clauses, EPC and O&M contracts, PPAs, project finance, equipment sales and Turkish energy regulations.

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