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.
Utility firms in developed markets will increasingly align corporate strategies with the trend of decarbonisation. The “utility of the future” will invest substantially in boosting renewable power generation, pursuing demand “behind the grid” and offering electric vehicle services. This strategy will bring them into greater competition with major oil and gas and tech firms.