Discover the top 30 legal risks foreign investors should check before investing in Turkey’s energy sector in 2026, including EMRA licenses, renewable projects, battery storage, grid connections, land rights, environmental permits, M&A, YEKDEM, financing and investment protection.

Turkey remains an important destination for international investment in electricity generation, renewable energy, battery storage, transmission-related infrastructure and energy technology. Official investment data describes a liberalized electricity market with substantial private-sector participation, approximately 119.6 GW of installed capacity as of mid-2025, including approximately 22.9 GW of solar, more than 13.5 GW of wind and 32.3 GW of hydropower.

Foreign investors also benefit from the general framework of Foreign Direct Investment Law No. 4875, under which foreign investors are generally free to invest and are entitled to equal treatment with domestic investors unless international agreements or special legislation provide otherwise. The legislation also contains protections concerning expropriation and transfer of investment proceeds.

However, buying or developing an energy project in Turkey requires considerably more than financial due diligence.

A power plant that appears commercially attractive may contain hidden risks involving its EMRA license, preliminary license obligations, grid connection, land rights, environmental approvals, storage commitments, construction permits, YEKDEM status, financing documents, regulatory compliance or change-of-control restrictions.

For foreign investors, comprehensive legal due diligence before signing or closing can therefore be decisive.

1. EMRA License Validity

The first question is whether the project possesses every energy-market license required for its activities.

The investor should examine the license itself, amendments, installed capacity, generation source, project location, license term, corporate holder and any special obligations.

Never assume that possession of a license means the project is fully compliant.

The license must correspond to the project actually being developed or operated.

2. Preliminary License Compliance

For development-stage generation projects, preliminary-license compliance can be one of the most significant risks.

Investors should identify every obligation that must be completed during the preliminary-license period and verify supporting documentation.

A project that has failed to satisfy critical preliminary-license obligations may have a significantly different value from the valuation presented by the seller.

This is particularly important for storage-integrated renewable projects moving from preliminary-license status toward generation licensing.

3. License Cancellation Risk

Due diligence should identify any existing circumstances capable of threatening the license.

These can include missed regulatory deadlines, inaccurate information, non-compliance with license obligations, failure to complete required approvals or other statutory breaches.

A foreign investor should not acquire a project first and investigate cancellation risk afterward.

4. Change-of-Control Restrictions

Acquiring shares in a licensed energy company may trigger regulatory issues even though the license itself is not formally transferred.

The transaction structure, percentage acquired, direct and indirect control, shareholder arrangements and applicable energy-market legislation must therefore be analyzed.

This issue becomes especially important in multi-layer international holding structures.

5. Competition Authority Clearance

Energy M&A transactions may also require Turkish merger-control analysis.

This risk is especially relevant in 2026 because the Turkish Competition Authority announced amendments to the merger-control communiqué in February 2026 and subsequently published updated merger and acquisition guidelines in May 2026.

Recent decisions demonstrate that energy transactions remain actively reviewed. For example, the Competition Board authorized the acquisition of all shares in İçanadolu Doğalgaz Elektrik Üretim A.Ş. through SOCAR-related entities in January 2026, while another May 2026 decision concerned the transition of Greeneco Enerji Elektrik Üretim A.Ş. to joint control.

Competition clearance should therefore be addressed before closing where applicable.

6. Grid Connection Rights

A renewable project has limited value if it cannot reliably connect to the electricity grid.

Investors should review:

• connection agreements;
• system-use agreements;
• connection capacity;
• connection point;
• technical conditions;
• correspondence with relevant network operators;
• outstanding obligations.

The financial model should match the legally secured connection position.

7. Grid Capacity and Curtailment Risk

Obtaining a connection does not eliminate every grid-related risk.

Investors should investigate whether the project faces congestion, capacity restrictions, curtailment exposure, network reinforcement obligations or additional infrastructure costs.

Grid assumptions should be tested legally as well as technically.

8. Battery Storage Obligations

Battery energy storage has become a major area of Turkish energy investment.

Storage-integrated projects require particularly careful review because the generation and storage components may be linked through regulatory commitments.

EMRA reported in 2026 that it had focused heavily on converting preliminary licenses for storage-integrated generation facilities into generation licenses and had issued generation licenses for 23 qualifying projects totaling approximately 1,070 MW.

An investor should therefore verify storage capacity, technical obligations, licensing milestones and consistency between the approved project and actual development plan.

9. Land Ownership

A power plant’s land position must be examined parcel by parcel.

The investor should determine whether project land is:

owned, leased, subject to an easement, allocated by a public authority or held through another legal mechanism.

The seller’s statement that the project “controls the land” is not enough.

Title and underlying rights should be independently verified.

10. Lease Agreement Risk

Where land is leased, the investor should examine lease duration, renewal, termination rights, rent adjustment, assignment restrictions, change-of-control provisions and registration issues.

A 49-year generation license combined with a significantly shorter or insecure land arrangement can create a fundamental bankability problem.

11. Easement and Access Rights

Generation assets may depend on easements for access roads, transmission lines, underground cables, pipelines or other infrastructure.

The plant site alone is therefore not enough.

A legal due diligence review should determine whether the project can lawfully access and operate every element required for generation.

12. Expropriation Risk

Some energy projects depend on expropriation or public-law land acquisition mechanisms.

Investors should determine whether relevant procedures have been completed, challenged or remain vulnerable to litigation.

Pending land disputes can delay construction and materially increase development costs.

13. Zoning Compliance

Energy development must also comply with applicable planning requirements.

Investors should verify the zoning position and determine whether the approved use permits the intended generation, storage and related infrastructure.

An attractive license cannot cure a fundamental zoning defect.

14. Construction Permits

Construction permits and related approvals should be matched against what has actually been built.

Particular attention should be given to capacity increases, additional buildings, storage units, substations and other later modifications.

Unauthorized construction can create both administrative and transaction risk.

15. Environmental Impact Assessment

Environmental due diligence is indispensable.

The investor should review the project’s environmental impact assessment position, conditions imposed by authorities, subsequent project modifications and any pending administrative litigation.

A technically operational project can still carry material environmental-law exposure.

16. Turkey’s New Climate Law

Climate regulation became materially more important after Turkey adopted its first comprehensive Climate Law in 2025.

The law establishes the legal framework for greenhouse-gas mitigation and adaptation and expressly addresses concepts including an emissions trading system, embedded greenhouse-gas emissions, offsetting and voluntary carbon markets.

For 2026 transactions, climate compliance should therefore form part of energy-sector due diligence rather than being treated as a remote ESG issue.

17. 2026 Climate Administrative Penalties

Climate-law enforcement should also be incorporated into compliance reviews.

The Climate Change Presidency lists a 2026/1 communiqué concerning administrative monetary penalties under Climate Law No. 7552, published in December 2025.

Investors acquiring emission-intensive energy businesses should therefore identify potential compliance liabilities and future ETS exposure.

18. YEKDEM Eligibility

Renewable-energy investors should never price YEKDEM revenues into a transaction without verifying eligibility.

EMRA confirms that the 2026 YEKDEM process operates under Renewable Energy Law No. 5346 and the applicable support-mechanism regulation. For participation in 2026, qualifying generation license holders were required to submit their applications by the applicable deadline, which fell on December 1, 2025 because November 30 was a non-working day.

The final 2026 YEK list was subsequently approved by an EMRA Board decision dated December 30, 2025.

An investor should verify the actual project entry rather than relying solely on the seller’s financial model.

19. Renewable Incentive Assumptions

A project may qualify for some form of renewable support but not necessarily on the economic terms assumed in an acquisition model.

Investors should verify:

support period, applicable price, commencement date, eligibility conditions, domestic-component treatment and termination consequences.

Incorrect incentive assumptions can significantly distort project valuation.

20. EPC Contract Risk

The EPC contract often determines whether the project will actually reach commercial operation on budget and on time.

Foreign buyers should review:

• fixed-price protection;
• completion deadlines;
• performance guarantees;
• delay damages;
• testing;
• acceptance;
• warranties;
• defects;
• termination;
• liability caps.

A weak EPC contract can transfer construction risk directly to the investor.

21. Existing EPC Claims

Acquiring an operational project does not necessarily eliminate construction risk.

The project company may already be involved in claims concerning defects, delay, variation orders, unpaid invoices, performance tests or liquidated damages.

Every outstanding EPC claim should be quantified and reflected in the transaction documentation.

22. Equipment Warranty Risk

Wind turbines, solar modules, inverters, transformers and battery systems are major-value assets.

Investors should determine whether warranties remain valid and transferable following the acquisition.

They should also investigate whether claims have already arisen.

A warranty that technically exists but cannot be transferred to the buyer may offer limited protection.

23. O&M Agreement Risk

Long-term operation and maintenance agreements can contain expensive termination payments, exclusivity clauses and restrictive service obligations.

Investors should review performance standards, availability guarantees, spare-parts obligations, indexation and termination rights.

This is particularly important for projects dependent on a single international turbine or technology supplier.

24. Financing and Security

Energy projects are frequently highly leveraged.

A buyer should identify:

share pledges, mortgages, account pledges, receivables assignments, equipment security, lender step-in rights, negative pledges and financial covenants.

An acquisition cannot safely be structured without understanding lender consent and existing security.

25. Foreign Currency and Financing Risk

International energy financing frequently involves euro or US-dollar debt while some project revenues and expenses may be exposed to Turkish-lira movements.

Foreign investors should analyze foreign-exchange legislation, contractual currency provisions, hedging arrangements and debt-service assumptions.

Currency exposure can become both a financial and contractual risk.

26. Tax Liabilities

A share acquisition can transfer historical tax exposure indirectly with the target company.

Due diligence should therefore examine corporate tax, VAT, withholding, stamp tax, customs exposure, transfer pricing and tax litigation.

Asset deals and share deals may also produce materially different tax consequences.

27. Employment and Contractor Liabilities

Power plants employ engineers, technicians, security staff and other workers and often rely heavily on subcontractors.

Potential liabilities include unpaid wages, severance, overtime, social-security contributions, occupational accidents and contractor-related claims.

These liabilities should be investigated before the target company is acquired.

28. Sanctions, AML and Beneficial Ownership

Foreign investors should identify the ultimate beneficial owners and counterparties connected to the project.

This becomes especially important where equipment, financing, shareholders, contractors or commodities have exposure to sanctions-sensitive jurisdictions.

Compliance due diligence should include beneficial ownership, anti-money-laundering controls, international sanctions exposure and contractual termination rights.

29. Dispute Resolution and Arbitration

The investor should identify every material dispute-resolution clause before acquisition.

Project documents may contain a mixture of:

Turkish court jurisdiction, domestic arbitration, international arbitration and administrative-court remedies.

This fragmentation can create substantial enforcement complexity.

Foreign investors should also consider whether applicable bilateral investment treaties provide additional protection against qualifying State measures.

Turkey’s foreign-investment framework expressly recognizes access to local courts and, where the legal requirements and agreements permit, national or international arbitration for certain investment disputes.

30. Exit Strategy and Future Sale

The final risk is often overlooked: How will the investor exit?

A foreign investor should examine whether project shares can later be transferred, what EMRA-related requirements may apply, whether lender consent will be required, whether pre-emption rights exist, and whether competition clearance could affect a future transaction.

Exit planning should begin before acquisition, not five years later.

2026 Legal Developments Foreign Energy Investors Should Watch

Three developments deserve particular attention in 2026.

First, Turkey continues to accelerate renewable and storage investment processes. EMRA has publicly identified lengthy and complicated permitting as a major historic obstacle and stated that legislative changes introduced in July 2025 were intended to accelerate licensing and permitting processes.

Second, the Climate Law No. 7552 has introduced a new compliance dimension for investors, including the developing emissions-trading and carbon-market framework and administrative-penalty regime.

Third, M&A due diligence must account for Turkey’s 2026 merger-control amendments and updated Competition Authority guidance. Foreign investors acquiring power plants or project companies should therefore analyze both energy-regulatory approvals and competition clearance before signing and closing.

These changes make a 2026 legal due diligence exercise materially different from a review performed several years ago.

Frequently Asked Questions

1. Can a foreign investor own an energy company in Turkey?

Generally, foreign investors can make direct investments in Turkey and receive equal treatment with domestic investors unless special legislation or international agreements provide otherwise. Energy-sector licensing and other sector-specific requirements must still be satisfied.

2. What is the biggest legal risk when buying a Turkish power plant?

There is no single universal risk. License validity, grid rights, land rights, environmental approvals, financing security and undisclosed liabilities are among the most important areas to investigate.

3. Should I check the EMRA license before signing an SPA?

Yes. The license, amendments, regulatory obligations and transaction-related approval requirements should be reviewed before the share purchase agreement becomes unconditional.

4. Does buying shares in an energy company require EMRA approval?

Regulatory requirements depend on the market, license, transaction structure and whether the transaction results in a relevant direct or indirect ownership or control change. The transaction should therefore be analyzed before signing and closing.

5. Can an energy acquisition require Competition Authority approval?

Yes. Transactions meeting applicable Turkish merger-control requirements may require clearance. The merger-control framework and related guidance were updated in 2026.

6. What should I check before acquiring a solar or wind project?

At minimum, review licensing, preliminary-license obligations, grid connection, land rights, zoning, construction approvals, environmental status, YEKDEM eligibility, EPC contracts, equipment warranties, financing, disputes and transaction approvals.

7. Are battery storage investments regulated in Turkey?

Yes. Storage-integrated generation projects operate within Turkey’s energy regulatory framework. EMRA’s 2026 activity confirms that storage-related preliminary licenses and their conversion to generation licenses remain an active regulatory area.

8. Does Turkey’s Climate Law affect energy investors in 2026?

Yes. Climate Law No. 7552 establishes a new statutory framework covering emissions reduction, adaptation, emissions trading and carbon-market concepts, with implementing measures continuing to develop.

9. Can foreign energy investors receive international investment treaty protection?

Potentially. Protection depends on the investor’s nationality, corporate structure, applicable BIT or other treaty, investment qualification and nature of the State measure. Treaty structuring should therefore be analyzed before the investment is completed.

10. Should a foreign investor conduct legal due diligence before signing or after signing?

Preferably before signing, or at minimum before the transaction becomes unconditional. Discovering a license, land, grid or environmental problem after closing can transform an attractive energy investment into a major regulatory dispute.

Legal Due Diligence and Investment Support for Foreign Energy Investors in Turkey

Investing in a Turkish energy project without comprehensive legal due diligence can expose a foreign investor to liabilities that are not visible in the project’s financial statements. A valid-looking license does not necessarily confirm secure land rights, grid capacity, environmental compliance, YEKDEM eligibility, regulatory approval, construction compliance or freedom from historical liabilities.

Fırat Fesih Kaya provides legal assistance to foreign investors, infrastructure funds, international energy companies, renewable-energy developers, lenders and strategic buyers concerning solar and wind power plant acquisitions, battery storage investments, energy M&A, EMRA licensing, regulatory due diligence, land rights, grid connection, EPC contracts, project financing, competition clearance, investment protection and energy disputes in Turkey.

For high-value energy transactions, legal review should begin before the investor signs binding transaction documents. Early due diligence can identify deal-breaking risks, support price adjustments and warranties, determine required regulatory approvals, and protect the investor against hidden liabilities after closing.

For a case-specific assessment of a proposed solar, wind, storage or other energy-sector investment in Turkey, you may contact our office.

Phone: +90 312 434 22 22
Mobile: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No: 221, Yıldırım Tower No: 148, 06520 Balgat, Çankaya, Ankara, Turkey