Buying an existing power plant in Turkey? Learn the land lease risks foreign investors should check before acquiring solar, wind and other energy projects, including lease expiry, termination, access rights, rent disputes and SPA protection.

Buying an existing power plant in Turkey does not necessarily mean that the project company owns all the land required for the facility. Many solar, wind and other renewable energy projects depend partly or entirely on leased land, easements, access rights, public land-use rights or agreements with multiple private landowners.

For a foreign investor, this creates an important acquisition risk. The power plant may have a valid generation license, operating turbines or solar modules and strong historical revenues, but its long-term value can be seriously affected if the underlying land rights are insecure.

A lease may expire years before the expected economic life of the project. A landlord may claim unpaid rent. An agreement may prohibit assignment or change of control. Access roads may cross land without sufficient contractual rights. Transmission cables may pass through neighboring parcels without adequate easements.

Accordingly, land due diligence should answer a simple question:

Does the project company have legally secure rights to occupy, access and operate every part of the power plant for the entire expected investment period?

For foreign investors purchasing existing energy projects in Turkey, this question should be answered before signing or closing the acquisition.

Why Land Rights Are Critical in Energy Project Acquisitions

A power plant is physically tied to specific land. Unlike many businesses, the buyer cannot simply relocate the project if a major land dispute develops.

A solar plant may require dozens of connected parcels for panels, transformers, substations and internal roads. A wind farm may require separate rights for turbine foundations, crane areas, access roads, underground cables and transmission infrastructure.

Therefore, reviewing only the main project parcel is insufficient.

The buyer should create a complete land rights map showing every parcel necessary for operation.

Each parcel should be matched with the relevant ownership document, lease, easement or other legal right.

Ownership vs Lease

The first step is determining which project land is owned and which is leased.

A seller’s presentation may state that the project “controls” 200 hectares. That does not necessarily mean the project company owns 200 hectares.

The land schedule should distinguish:

Owned Land → Leased Land → Easement Rights → Public Land → Forest Land → Informal Access → Third-Party Infrastructure Rights.

The buyer can then assess the security of each category separately.

Remaining Lease Period

One of the most important issues is the remaining term.

Suppose a foreign investor acquires a solar plant expecting another 20 years of operation, but an essential land lease expires in eight years.

The investor’s financial model assumes revenue that depends on land rights extending significantly beyond the lease term.

This creates a major valuation problem.

The buyer should therefore compare:

Expected Project Life → Remaining License Period → Remaining Land Lease Period → Financing Period.

Material inconsistencies should be resolved before closing.

Automatic Renewal Clauses

A lease may contain an automatic extension mechanism.

However, the buyer should examine exactly how renewal works.

Is renewal automatic unless notice is given?

Does renewal require landlord consent?

Can the landlord increase the rent?

Is there a maximum extension period?

A financial model should not treat an optional lease renewal as though it were a guaranteed property right.

Landlord Termination Rights

Termination provisions deserve particularly careful review.

Some leases permit termination if the tenant breaches payment, construction, environmental or other obligations.

Others may contain broadly drafted default clauses.

The buyer should determine whether any existing breach has already created a termination right.

A project company may technically remain in possession while a landlord already has grounds to challenge the lease.

Unpaid Rent

Outstanding land rent can create immediate post-closing problems.

The buyer should reconcile lease agreements with accounting records and payment evidence.

For every material lease, determine:

Contractual Rent → Rent Increases → Amount Paid → Outstanding Amount → Disputed Amount.

Seller confirmation alone should not be sufficient where land is essential to project operation.

Rent Increase Mechanisms

Long-term energy leases often contain adjustment provisions.

These can materially affect operating expenses.

The buyer should identify whether rent increases depend on inflation, foreign currency, electricity revenue, fixed percentages or another formula.

Unexpected escalation can reduce project EBITDA and therefore acquisition value.

The financial model should reflect the actual contractual rent mechanism rather than a generic inflation assumption.

Change of Control Clauses

This issue is particularly important in share acquisitions.

A foreign investor may assume that no land transfer occurs because it is purchasing shares of the project company rather than the land lease itself.

However, the lease may contain a change-of-control clause.

The landlord may have negotiated the right to approve a change in ownership of the project company.

The buyer should therefore review every material lease for:

Change of Control → Prior Consent → Notification → Termination Right → Additional Payment.

If landlord consent is required, obtaining it may need to become a condition precedent.

Assignment Restrictions

Assignment becomes particularly important in an asset acquisition.

A lease may prohibit transfer without the landlord’s consent.

The buyer should never assume that purchasing the physical power plant automatically transfers the right to occupy the land.

Where an asset deal is contemplated, each lease should be analyzed individually to determine whether it can be assigned.

Informal Lease Arrangements

Informal land arrangements are a serious warning sign.

A project may have operated for years based on personal relationships with local landowners.

For example, the company may use additional land for vehicle access or equipment storage without a properly documented long-term right.

Historical cooperation does not guarantee future cooperation.

After an acquisition, a landowner may demand higher payments or deny access.

Critical project rights should therefore be documented before closing.

Access Roads

Access is often overlooked during energy due diligence.

Owning or leasing the turbine or solar-panel site is not sufficient if the project company cannot legally reach it.

Wind projects deserve particular attention because major turbine repairs can require large cranes and heavy transport vehicles.

The buyer should verify rights over every critical access road.

The relevant right should also be sufficient for the type of vehicles and equipment required for maintenance.

Wind Turbine Foundations

Wind projects frequently involve many separate parcels.

Each turbine foundation should be checked individually.

A useful due diligence matrix should include:

Turbine Number → Parcel → Owner → Legal Right → Lease Term → Rent → Encumbrances → Access → Dispute Status.

One problematic turbine parcel can reduce project capacity and create broader operational difficulties.

Crane Areas

Wind turbines require crane areas for major maintenance.

These areas may not be identical to the turbine foundation parcels.

A project may have sufficient rights for ordinary turbine operation but inadequate rights for future gearbox, generator or blade replacement.

Foreign investors should therefore verify crane-area rights separately.

Underground Cables

Internal electricity cables can cross numerous third-party parcels.

The buyer should determine whether appropriate easements or contractual rights exist.

This is particularly important where cables connect geographically separated turbines or generation units to the project’s substation.

An undocumented cable route can create significant future disputes.

Transmission Line Rights

Transmission infrastructure can extend well beyond the generation site.

The buyer should identify the legal basis for every material transmission route associated with the project.

Relevant rights may involve private property, public land or other land-use structures.

The investor should not limit property due diligence to the fenced boundaries of the power plant.

Substation Land

The substation can be one of the most important pieces of project infrastructure.

The buyer should confirm the legal rights relating to the land on which it is situated and any access required for operation and maintenance.

A land problem affecting the substation can potentially affect the entire facility.

Multiple Landowners

Large projects can involve dozens or even hundreds of landowners.

This increases transaction risk.

Different leases may have different:

expiration dates,

rent formulas,

termination rights,

renewal mechanisms,

and assignment provisions.

The buyer should therefore avoid relying on a single summary prepared by the seller.

Every critical agreement should be independently reviewed.

Inheritance Problems

Long-term private leases can become complicated when the original landlord dies.

Ownership may pass to multiple heirs.

The buyer should determine whether payments and contractual relationships have been properly maintained after inheritance.

Disputes among heirs can create practical difficulties even where the project company believes the lease remains valid.

Co-Owned Land

Some parcels may be owned by several persons.

The buyer should investigate whether the parties who executed the relevant agreements had sufficient authority and whether later ownership changes affect the arrangement.

Co-ownership disputes can become particularly difficult when project infrastructure occupies only part of a larger parcel.

Title Restrictions and Encumbrances

Land due diligence should include title review.

Relevant issues can include:

Mortgages → Attachments → Easements → Rights of Third Parties → Pending Litigation → Restrictions.

The fact that a project company owns land does not necessarily mean the land is free from legal risk.

Mortgaged Project Land

Project lenders frequently take security over project property.

A mortgage is not automatically problematic where it forms part of disclosed project financing.

However, the buyer must understand whether the mortgage will remain after closing, be released or form part of refinancing.

This should be coordinated with the acquisition funds flow.

Attachment on Project Land

An attachment can indicate financial or litigation problems.

The buyer should determine:

who obtained the attachment,

which debt it secures,

whether enforcement proceedings continue,

and whether the attachment can interfere with closing.

A seller’s promise to resolve the issue later should not substitute for appropriate closing protection.

Land Litigation

Pending land disputes can threaten project operation.

These may concern:

ownership,

boundaries,

lease validity,

rent,

access,

easements,

or termination.

The buyer should review both filed litigation and threatened disputes.

Correspondence from a landowner demanding termination or substantially increased rent can be economically important even before proceedings begin.

Boundary Problems

Physical project boundaries should correspond with legal cadastral boundaries.

This becomes particularly important where solar panels, roads, fences or other infrastructure were installed close to parcel boundaries.

Technical survey information should therefore be coordinated with legal title review where necessary.

Unauthorized Use of Neighboring Land

A project may accidentally occupy neighboring land.

This can happen with roads, fences, cable routes or construction areas.

Such use can remain unchallenged for years and only become problematic after ownership changes.

Foreign investors should therefore compare actual project infrastructure with the legal land rights available to the company.

Public Land Rights

Some energy projects use public land.

The buyer should determine the legal basis, duration, fees and conditions applicable to that use.

Public land arrangements should not be treated as ordinary private leases.

The investor should also identify whether the acquisition itself requires notification, approval or other action concerning those rights.

Forest Land

Wind and other renewable projects may involve forest areas.

The buyer should review applicable permissions, payment obligations and project boundaries.

Roads and transmission infrastructure can also cross forest areas even when turbines or generation equipment are situated elsewhere.

The complete project footprint should therefore be considered.

Agricultural Land

Solar projects can raise issues concerning the classification and permitted use of agricultural land.

The buyer should verify that the project’s land-use position is legally consistent with the facility as constructed and operated.

A long operating history does not automatically eliminate historical land-use risks.

Zoning and Land Rights Must Be Reviewed Together

A valid lease does not necessarily mean that the land can legally be used for the intended energy facility.

Land rights and zoning should therefore be analyzed together.

The buyer should verify that the project’s physical configuration corresponds with the relevant planning and construction documentation.

This is particularly important where capacity has been expanded or additional equipment installed after initial development.

Lease Rights and Generation License Duration

The buyer should compare land tenure with the remaining generation license period.

If the generation license extends considerably beyond critical leases, the project may eventually face land-renewal risk.

This should be reflected in valuation.

The investor may require extensions before closing rather than assuming negotiations with landowners will succeed years later.

Lease Rights and Project Finance

Lenders also care about land security.

Financing documents may require project land rights to remain valid throughout an agreed period.

A short or terminable lease may therefore create both operational and financing problems.

The buyer should determine whether existing land problems constitute or could create defaults under project financing documents.

Land Lease Representations and Warranties

The SPA should contain appropriate land-related representations.

Depending on the project, the seller may represent that disclosed leases are valid, material rents have been paid, no termination notices have been received and no undisclosed material land disputes exist.

The wording should correspond with actual due diligence findings.

Generic property warranties may be insufficient for a geographically complex wind or solar project.

Specific Indemnity for Existing Land Disputes

Suppose due diligence identifies litigation with a landowner concerning five wind turbines.

The risk is known before closing.

A general warranty may be qualified by disclosure of the litigation.

The buyer may therefore require a specific indemnity covering agreed losses resulting from the dispute.

Depending on negotiations, this could include litigation costs, settlement payments or specified operational losses.

Lease Extension as a Condition Precedent

Some land problems should be resolved before closing.

Suppose an essential solar-project lease expires in two years while the buyer expects another fifteen years of operation.

The buyer may require an extension as a condition precedent.

This is often stronger protection than accepting the risk and pursuing the seller later.

Landlord Consent as a Condition Precedent

Where a lease requires consent for a change of control or assignment, the buyer should consider requiring the consent before closing.

Otherwise, completion of the acquisition itself could create a contractual default.

Purchase Price Adjustment

Land problems can also affect valuation.

If part of the project depends on leases that cannot be extended on commercially reasonable terms, the buyer may reduce its valuation accordingly.

Known land costs should be reflected directly in the investment model.

Escrow for Unresolved Land Risks

Where a dispute cannot be resolved before closing, part of the purchase price can potentially be held in escrow.

This provides financial security if the risk later materializes.

The amount and duration should reflect the potential exposure.

Example: Solar Plant With an Expiring Lease

A foreign investor plans to acquire an operating solar project with an expected remaining economic life of eighteen years.

Due diligence reveals that approximately 30% of the project occupies land under a lease expiring in six years.

Renewal requires landlord agreement.

The seller’s financial model nevertheless assumes uninterrupted operation for eighteen years.

The buyer should not treat the extension as guaranteed.

It may require the lease to be extended before closing or adjust the purchase price to reflect the risk.

Example: Wind Farm Without Secure Heavy-Equipment Access

A foreign buyer acquires a wind farm where all turbine sites are properly leased.

However, the main road required for heavy crane access crosses private property under an informal arrangement.

Routine vehicles have used the road for years without objection.

After closing, the landowner demands substantial payment for crane access.

This illustrates why land due diligence must examine access rights, not merely turbine foundations.

Example: Change of Control Requires Landlord Consent

The project company leases a critical substation parcel.

The lease provides that a direct or indirect change of control requires prior landlord consent.

The buyer acquires the company without obtaining consent.

The transaction can therefore create a lease dispute even though the project company itself remains the tenant.

A careful SPA should identify such consent as a closing requirement.

Example: Underground Cable Crosses Neighboring Property

A solar project has operated successfully for eight years.

During acquisition due diligence, the buyer discovers that an important underground cable crosses a neighboring parcel without a registered easement or sufficiently robust contractual right.

The issue should be regularized before closing or appropriately protected through the acquisition agreement.

Major Land Red Flags for Foreign Energy Investors

Foreign buyers should pay particular attention to leases shorter than the expected project life, unclear renewal rights, unpaid rent, landlord termination notices, change-of-control restrictions, non-transferable leases, informal access arrangements, missing road rights, missing cable easements, unresolved inheritance issues, co-owned parcels, title attachments, mortgages, land litigation, unauthorized occupation, zoning inconsistencies and discrepancies between project maps and cadastral records.

Any one of these issues can materially affect project value.

Land Due Diligence Checklist for Existing Energy Projects

Before purchasing an existing Turkish energy project, the buyer should verify:

Project Parcels → Ownership → Leases → Lease Duration → Renewal → Rent → Rent Increases → Payment Status → Termination Rights → Change of Control → Assignment → Access Roads → Crane Areas → Cable Routes → Transmission Lines → Substation → Easements → Public Land → Forest Rights → Encumbrances → Mortgages → Attachments → Litigation → Zoning → Project Maps → Financing Requirements → SPA Warranties → Indemnities → Conditions Precedent.

For wind projects, this analysis should ideally be completed turbine by turbine.

For large solar projects, a parcel-by-parcel matrix can identify gaps that might otherwise remain hidden.

Frequently Asked Questions

1. Can a foreign investor buy an energy project built on leased land in Turkey?

Yes. However, the buyer should verify the validity, duration and security of the land rights before completing the acquisition.

2. Does buying the project company’s shares automatically terminate its leases?

Not necessarily. However, individual leases may contain change-of-control provisions requiring consent or notification.

3. What happens if the lease expires before the generation license?

The project may face a serious operational risk unless the lease can be extended or replacement land rights obtained.

4. Should access roads be included in land due diligence?

Yes. Secure access can be essential for operation, maintenance and major equipment replacement.

5. Are wind turbine foundation leases enough?

Not always. Wind projects may also require rights for roads, crane areas, cables, substations and transmission infrastructure.

6. Can a lease be transferred in an asset deal?

That depends on the lease terms and applicable legal requirements. Landlord consent may be required.

7. What if the project has unpaid land rent?

The buyer should determine the amount, whether default or termination rights have arisen and who will pay the liability before or after closing.

8. Can a buyer require leases to be extended before closing?

Yes. Extension of strategically important leases can be negotiated as a condition precedent.

9. What if there is already litigation with a landowner?

The buyer should evaluate the operational and financial exposure and consider a specific indemnity, escrow, price adjustment or pre-closing resolution.

10. What is the biggest land-related mistake when buying an energy project?

Reviewing only the parcels containing generation equipment while ignoring roads, cables, substations, transmission infrastructure and other land rights necessary for continued operation.

Legal Support for Foreign Investors Buying Existing Energy Projects in Turkey

Land rights should be treated as a core component of the power plant rather than a secondary real-estate issue. A project with excellent generation figures and a valid license can still lose substantial value if the investor cannot legally use or access critical land throughout the expected investment period.

Firat Fesih Kaya Law Office assists foreign investors and international energy companies with acquisitions of solar, wind and other power projects in Turkey. Firat Fesih Kaya can assist with project land due diligence, lease reviews, easement analysis, title investigations, SPA negotiations, land-related representations and warranties, specific indemnities and closing conditions.

The buyer’s objective should be clear: every turbine, panel, road, cable, substation and transmission route required for project operation should have a legally secure land basis before the acquisition price is paid.

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