Once a premium destination for overseas investors, Turkey’s power sector has recently been struggling with the impact of lower-than-expected growth rates, partial market liberalisation and fixed, long-term natural gas contracts. Power generation firms face further stress as the economic impact of the pandemic bites. Efforts to arrange a new debt restructuring deal have been delayed by the virus and wider economic woes, casting uncertainty over future demand. However, the sector retains some high-grade assets, however, which may attract future investor interest.
Following the beginning of Russia’s war with Ukraine on 24 February and Moscow’s use of the weapon of natural gas supplies against European countries in response to the Western sanctions, many European states have begun looking for alternatives to Russian gas that constitutes around 40% of Europe’s natural gas imports. This is so especially after Moscow cut gas supplies from a number of European countries like the Netherlands and Denmark, in addition to one of the companies that transport gas to Germany, in response to its non-payment to Russia in roubles.