Learn the essential legal checklist for Operation & Maintenance (O&M) Agreements in Turkey. This 2026 guide explains key clauses for power plants, including solar (GES), wind (RES), hydro (HES), geothermal (JES), battery storage (BESS), performance guarantees, EMRA compliance, liability, insurance, and dispute resolution.

After a power plant has been successfully constructed and commissioned, its long-term profitability depends on efficient operation and proper maintenance. While Engineering, Procurement and Construction (EPC) Contracts govern the construction phase, Operation & Maintenance (O&M) Agreements regulate the operational life of the facility, which may extend for 20 to 30 years.

For foreign investors, infrastructure funds, independent power producers (IPPs), utilities, and multinational energy companies investing in solar power plants (GES), wind farms (RES), hydroelectric power plants (HES), geothermal facilities (JES), battery energy storage systems (BESS), natural gas power plants, biomass facilities, hydrogen projects, and electric vehicle charging infrastructure, a properly negotiated O&M Agreement is essential to preserve asset value, maximize electricity production, and ensure regulatory compliance.

An inadequate O&M Agreement may result in:

Reduced electricity generation.
Equipment failures.
EMRA compliance violations.
Increased operating costs.
Loss of warranty protection.
Insurance disputes.
Project finance defaults.
Significant revenue losses.

Turkish O&M Agreements are primarily governed by:

Turkish Code of Obligations No. 6098
Turkish Commercial Code No. 6102
Electricity Market Law No. 6446
Renewable Energy Law No. 5346
EMRA (EPDK) Regulations
Occupational Health and Safety legislation.
Environmental legislation.
Project finance documentation.

This 2026 Updated Legal Guide explains the essential legal clauses every foreign investor should include in an Operation & Maintenance Agreement for power plants in Turkey.

What Is an Operation & Maintenance (O&M) Agreement?

An O&M Agreement is a long-term contract under which the operator undertakes responsibility for:

Daily operation.
Preventive maintenance.
Corrective maintenance.
Emergency repairs.
Performance monitoring.
Regulatory compliance.
Technical reporting.
Spare parts management.

The agreement defines operational responsibilities after Commercial Operation Date (COD).

Why O&M Agreements Are Critical

A properly drafted agreement helps:

Maximize electricity production.
Protect equipment warranties.
Reduce downtime.
Extend equipment life.
Improve project bankability.
Ensure EMRA compliance.
Protect investor returns.
Reduce operational disputes.

Which Power Plants Require O&M Agreements?

O&M Agreements are commonly used for:

Solar Power Plants (GES).
Wind Farms (RES).
Hydroelectric Plants (HES).
Geothermal Plants (JES).
Natural Gas Combined Cycle Plants.
Biomass Facilities.
Battery Energy Storage Systems (BESS).
Hybrid Renewable Energy Projects.
Hydrogen Facilities.

1. Scope of Services

The agreement should clearly define:

Operational responsibilities.
Maintenance activities.
Monitoring services.
Engineering support.
Spare parts management.
Grid coordination.
Regulatory reporting.
Emergency response.

Unclear service descriptions frequently result in disputes.

2. Performance Standards

The operator should comply with measurable Key Performance Indicators (KPIs), including:

Plant availability.
Capacity factor.
Response times.
Scheduled maintenance.
Forced outage rates.
Equipment reliability.
Energy efficiency.

Performance standards should be objective and verifiable.

3. Availability Guarantees

Many O&M Agreements guarantee:

Annual availability.
Monthly availability.
Turbine availability.
Inverter availability.
Transformer availability.
Storage system availability.

Failure to achieve guaranteed availability may trigger financial remedies.

4. Preventive Maintenance

The agreement should include:

Inspection schedules.
Lubrication.
Equipment testing.
Cleaning.
Calibration.
Firmware updates.
Seasonal maintenance.

Preventive maintenance significantly reduces unexpected failures.

5. Corrective Maintenance

Clearly define:

Fault response.
Repair obligations.
Replacement procedures.
Technical investigations.
Root cause analysis.

Emergency repair obligations should also be specified.

6. Spare Parts Management

The contract should regulate:

Spare parts inventory.
Ownership.
Storage.
Procurement.
Delivery times.
Critical component replacement.

Supply-chain planning is particularly important for imported equipment.

7. Remote Monitoring

Modern renewable facilities rely on:

SCADA systems.
Remote diagnostics.
Performance analytics.
Predictive maintenance.
Cybersecurity monitoring.
Alarm management.

The agreement should allocate responsibility for digital monitoring systems.

8. Grid Compliance

The operator should ensure compliance with:

Grid codes.
System operator instructions.
Frequency control.
Voltage regulation.
Curtailment procedures.
Dispatch obligations.

Grid non-compliance may lead to financial penalties or regulatory action.

9. EMRA Compliance

The O&M provider should assist with:

Regulatory reporting.
License compliance.
Technical documentation.
Administrative inspections.
Record keeping.
Compliance audits.

Failure to comply may expose the project owner to administrative sanctions.

10. Environmental Compliance

The agreement should allocate responsibility for:

Waste management.
Noise monitoring.
Water management.
Hazardous materials.
Environmental reporting.
Pollution prevention.

Environmental obligations should remain consistent with applicable permits.

11. Occupational Health and Safety

The operator should maintain:

Safety procedures.
Employee training.
Risk assessments.
Emergency response plans.
Personal protective equipment.
Accident reporting.

Compliance with Turkish occupational safety legislation is essential.

12. Personnel Requirements

The agreement should specify:

Minimum staffing.
Qualifications.
Certifications.
Shift schedules.
Language requirements.
Replacement personnel.

Personnel shortages may affect plant performance.

13. Reporting Obligations

Regular reports should include:

Production data.
Availability reports.
Maintenance history.
Equipment failures.
Spare parts usage.
Environmental compliance.
Safety incidents.

Monthly reporting is standard practice.

14. Fees

Common pricing models include:

Fixed annual fee.
Availability-based fee.
Performance bonus.
Performance deductions.
Cost reimbursement.

Compensation should align with measurable performance.

15. Performance Incentives

Bonuses may be linked to:

Increased production.
Reduced downtime.
Higher availability.
Lower maintenance costs.
Improved efficiency.

Well-designed incentives align the interests of the parties.

16. Penalty Mechanisms

The agreement may provide for:

Availability deductions.
Response-time penalties.
Missed maintenance penalties.
Reporting failures.
Regulatory non-compliance.

Penalty provisions should remain commercially reasonable.

17. Equipment Warranties

The O&M provider should preserve:

Manufacturer warranties.
EPC warranties.
Performance guarantees.
Spare parts warranties.

Improper maintenance may invalidate warranty protection.

18. Insurance

The agreement should allocate responsibility for:

Property insurance.
Machinery breakdown insurance.
Business interruption insurance.
Third-party liability.
Environmental liability.

Insurance obligations should align with financing documents.

19. Liability

Clearly define:

Direct damages.
Consequential damages.
Liability caps.
Excluded losses.
Gross negligence.
Willful misconduct.

Risk allocation should reflect the commercial value of the project.

20. Force Majeure

The contract should specify:

Qualifying events.
Notification procedures.
Suspension of obligations.
Time extensions.
Termination rights.

Force Majeure provisions should remain consistent with EPC and financing documents.

21. Change in Law

The agreement should address:

New legislation.
EMRA regulatory changes.
Tax reforms.
Environmental regulations.
Grid code amendments.

Regulatory costs should be allocated clearly.

22. Cybersecurity

Modern power plants require:

Network protection.
Data security.
SCADA protection.
Incident response.
Software updates.
Access control.

Cybersecurity clauses are increasingly important for renewable energy facilities.

23. Assignment

The contract should regulate:

Assignment rights.
Lender step-in rights.
Affiliate transfers.
Change of control.

Assignment provisions should remain consistent with project finance documents.

24. Termination

Termination provisions should cover:

Material breach.
Persistent underperformance.
Insolvency.
Force Majeure.
Convenience termination.
Transition assistance.

The agreement should also regulate handover procedures.

25. Dispute Resolution

International investors frequently choose:

ICC Arbitration.
ISTAC Arbitration.
LCIA Arbitration.
SIAC Arbitration.

The governing law and seat of arbitration should also be specified.

Top 30 Clauses Every O&M Agreement Should Include

Scope of services.
Performance standards.
Availability guarantees.
Preventive maintenance.
Corrective maintenance.
Spare parts.
SCADA monitoring.
Grid compliance.
EMRA compliance.
Environmental obligations.
HSE compliance.
Personnel.
Reporting.
Fees.
Performance incentives.
Penalty regime.
Equipment warranties.
Insurance.
Liability.
Force Majeure.
Change in Law.
Cybersecurity.
Assignment.
Confidentiality.
Intellectual property.
Audit rights.
Termination.
Governing law.
Arbitration.
Entire agreement.

Common Mistakes Made by Energy Investors

Foreign investors frequently:

Use generic O&M templates.
Fail to define KPIs.
Ignore EMRA compliance obligations.
Accept weak availability guarantees.
Overlook cybersecurity risks.
Ignore warranty preservation.
Omit reporting obligations.
Fail to coordinate EPC and O&M contracts.
Ignore lender requirements.
Delay legal review.

These mistakes often reduce project efficiency and increase operational costs.

Best Practices Before Signing

Before executing an O&M Agreement:

Conduct technical and legal due diligence.
Review EPC warranty obligations.
Verify EMRA compliance requirements.
Align the agreement with financing documents.
Establish measurable KPIs.
Define reporting obligations.
Review insurance requirements.
Obtain specialist Turkish legal advice.

A carefully negotiated O&M Agreement significantly improves the long-term performance and value of the project.

Why Professional Legal Assistance Is Essential

Negotiating an O&M Agreement requires expertise in:

Turkish Energy Law.
Electricity Market Law.
Turkish Commercial Code.
Turkish Code of Obligations.
EMRA regulations.
Renewable energy law.
Project finance.
International arbitration.

An experienced Turkish energy lawyer can:

Draft and negotiate O&M Agreements.
Allocate operational risks.
Protect equipment warranties.
Ensure EMRA compliance.
Coordinate EPC, financing, and O&M documentation.
Advise on liability and insurance provisions.
Represent investors in operational disputes.
Protect long-term project profitability.

Early legal planning minimizes operational risks while ensuring compliance with Turkish energy legislation.

Frequently Asked Questions

1. What is an O&M Agreement?

An Operation & Maintenance Agreement is a contract governing the operation, inspection, maintenance, repair, and technical management of a power plant after construction has been completed and commercial operation has commenced.

2. Is an O&M Agreement mandatory in Turkey?

Although Turkish law does not generally require every power plant owner to enter into a separate O&M Agreement, such agreements are standard practice for utility-scale energy projects because they help ensure regulatory compliance, operational efficiency, and lender confidence.

3. What are the most important KPIs in an O&M Agreement?

Common KPIs include plant availability, response times, forced outage rates, maintenance completion rates, production efficiency, and compliance with scheduled maintenance programs.

4. Should the O&M contractor be responsible for EMRA compliance?

The agreement should clearly allocate operational compliance responsibilities, including technical reporting, inspections, and assistance with regulatory obligations. However, the ultimate legal responsibility toward the authorities often remains with the license holder unless otherwise provided by law.

5. Why are availability guarantees important?

Availability guarantees directly affect electricity production and project revenue. Failure to meet agreed availability levels may result in performance deductions, liquidated damages, or other contractual remedies.

6. Should the O&M Agreement be coordinated with the EPC Contract?

Yes. Warranty obligations, performance guarantees, maintenance responsibilities, spare parts provisions, and technical standards should be fully aligned with the EPC Contract to avoid contractual conflicts and preserve manufacturer warranties.

7. Can an O&M Agreement include performance bonuses?

Yes. Many agreements include incentive mechanisms rewarding the operator for achieving higher availability, increased production, improved efficiency, or reduced downtime, provided that the performance criteria are objectively measurable.

8. Why should foreign investors hire a Turkish energy lawyer?

A Turkish energy lawyer can draft and negotiate O&M Agreements, ensure consistency with EPC Contracts and project finance documents, allocate operational and regulatory risks, protect warranty rights, ensure compliance with Turkish energy legislation and EMRA requirements, and represent investors in arbitration or litigation arising from operational disputes.

Legal Support – Contact Our Energy Lawyers

A well-drafted Operation & Maintenance Agreement is essential for maximizing the long-term value of a power plant. Clearly defined operational responsibilities, measurable performance standards, and balanced risk allocation help protect revenue, preserve equipment, and reduce the likelihood of costly disputes.

Fırat Fesih Kaya and our legal team advise foreign investors, renewable energy developers, infrastructure funds, independent power producers, EPC contractors, multinational corporations, lenders, and institutional investors on Operation & Maintenance Agreements, EMRA compliance, project finance, renewable energy investments, EPC Contracts, international arbitration, and all aspects of Turkish energy and commercial law.

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Email: info@firatfesihkaya.av.tr

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