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Project finance is a specialized area of law and finance where large-scale infrastructure and industrial projects are funded through a structure that relies primarily on the project's future cash flow for repayment. In Turkey, project finance has seen rapid development, especially in areas such as energy, transportation, utilities, and healthcare. The legal framework in Turkey supports both local and international investors with several sophisticated financing techniques while regulating the rights and obligations of all parties involved. The complexity of these projects often requires navigating Turkish regulatory requirements, contractual arrangements, and risk allocations, making sound legal advice essential.
Securing, developing, managing, and operating a project using project finance methods in Turkey involves several intricate legal processes. You may need a lawyer in the following situations:
Project finance in Turkey is governed by a mix of general commercial laws and specialized sector-specific regulations. Key aspects include:
Project finance is a method of funding projects where repayment is secured by the project's cash flow and assets, rather than the borrower's balance sheet. In Turkey, it is popular for large infrastructure and energy projects.
Energy (including renewables), transportation (such as highways, airports, railways), healthcare, and utilities (water, waste) are the predominant sectors for project finance transactions in Turkey.
Project finance is non-recourse or limited recourse, meaning lenders primarily rely on the project assets and revenue streams for repayment, rather than the credit of project sponsors.
Approvals vary by sector but typically include permits, licenses, public procurement clearance, and environmental impact assessments from relevant Turkish government agencies.
Yes, foreign investors are welcomed and treated equally under Turkish law. There are well-established regulations facilitating foreign investment and cross-border financing arrangements.
Collateral commonly includes mortgages over land and buildings, pledges over company shares, project accounts, receivables, movables, and assignment of project rights.
Yes, there are incentives such as tax benefits, customs duty exemptions, and special investment zones, particularly for strategic sectors and public-private partnerships.
Risks are typically allocated between project parties through carefully drafted contract provisions, including force majeure, political risk guarantees, and insurance arrangements.
Turkish law provides for debt restructuring, refinancing, or bankruptcy processes. Early involvement of legal counsel is essential to protect all parties’ interests.
The timeline varies depending on project complexity, regulatory requirements, and negotiation processes. It can range from several months to over a year.
If you need more information or wish to connect with a regulatory body or organization, you may consider the following:
If you are considering a project or facing a legal question related to project finance in Turkey, the best course of action is to consult with a legal expert experienced in this field. Here are suggested steps:
Legal guidance can not only help you comply with Turkish laws and regulations but also optimize contracts, attract investment, and manage project risks more effectively. Taking early legal advice is crucial for the success of your project finance transaction in Turkey.
