Türkiye is using its presidency of COP31 to press governments, development banks and private investors to convert climate commitments into financeable projects, a shift with direct implications for foreign capital seeking opportunities in the country’s energy, industrial and infrastructure transformation. At an investment summit in Istanbul on October 23, officials argued that diplomacy alone will not close the funding gap. Investors, however, will judge Türkiye’s “implementation COP” less by the declarations made in Antalya than by the availability of bankable projects, predictable regulation and credible mechanisms for sharing currency, construction and policy risk.
From Climate Diplomacy to an Investment Pipeline
Speaking at the Investment Summit Towards COP31, Halil Hasar, Türkiye’s head of climate change and COP31 chief climate diplomacy officer, called for negotiations to progress from dialogue to consensus and then to action. The gathering, organized by the Investment and Finance Office and the International Investors Association, or YASED, brought together government agencies, financial institutions and multinational companies ahead of COP31, scheduled for November 9 to 20 in Antalya.
The emphasis on implementation reflects a broader problem confronting emerging markets. YASED Chairman Ali Fuat Orhonoğlu told the summit that developing countries face an annual financing gap of about $4 trillion in meeting the Sustainable Development Goals, with roughly half associated with the energy transition. International investment is expected to supply not only capital, but also technology, engineering capacity and operating expertise.
Orhonoğlu said YASED’s analysis of COP hosts between 2015 and 2024 found that greenfield project numbers increased by approximately 50 percent after hosting the conference, while announced investment commitments rose by 135 percent. Those figures suggest that a COP can improve visibility, but they should not be interpreted as a guaranteed causal effect. Host economies still need competitive projects, functioning infrastructure and durable policy frameworks to retain investor interest after delegates leave.
Türkiye’s underlying FDI position provides a base from which to build. According to the Investment and Finance Office, the country attracted $13.1 billion of FDI in 2025, up 12.2 percent from the previous year. Manufacturing received $3.02 billion, equal to 31 percent of total inflows. Treasury and Finance Minister Mehmet Şimşek said FDI excluding real estate reached $10.7 billion, its highest level in a decade.
Yet climate-related investment must expand far beyond the annual FDI figures. Investment and Finance Office President Ahmet Burak Dağlıoğlu said in October that 94 climate-friendly projects had been attracted under Türkiye’s international investment strategy. The challenge is to move from a collection of individual projects toward a continuous pipeline spanning power generation, grids, storage, industrial efficiency, transport, recycling and climate-resilient urban services.
The Scale of Türkiye’s Capital Requirement
Energy is the clearest measure of the financing requirement. Türkiye aims to lift combined wind and solar capacity from about 30 gigawatts when its roadmap was announced in 2024 to 120 gigawatts by 2035. Energy Minister Alparslan Bayraktar estimated that the renewable-energy roadmap would require $108 billion of investment. The government also plans a 40-gigawatt high-voltage direct-current transmission corridor, with grid modernization requiring approximately $30 billion.
The expansion is already visible. Energy Ministry data show that total installed generating capacity reached 127,355 megawatts by the end of September 2026. Solar represented 22.2 percent and wind 12.2 percent, while hydropower accounted for another 25.4 percent. Nevertheless, generation data illustrate why installed capacity alone is insufficient. In 2025, coal produced 33.3 percent of Türkiye’s electricity and natural gas generated 22.3 percent. Wind and solar together supplied 22.7 percent.
That gap creates opportunities in storage, grid balancing, digital energy management and industrial electrification, not just in constructing renewable plants. Bayraktar has said 2,000 to 3,000 megawatts of renewable capacity paired with storage could enter operation from 2026. His ministry also expects electricity demand to rise from 364.8 terawatt-hours in 2025 to 510.5 terawatt-hours in 2035.
For international developers, these projections support a large addressable market. They also raise questions about grid connection rights, curtailment, land access, environmental assessment, equipment localization and the allocation of market risk. A generation license or auction award does not automatically make a project financeable. Lenders need clarity on revenues, connection schedules, construction obligations and the treatment of regulatory changes over a project lasting 15 to 25 years.
Ziraat Bank CEO Alpaslan Çakar told the Istanbul summit that Turkish banking-sector lending to energy had exceeded TL1 trillion. Project-finance lending for energy investments had surpassed TL695 billion, while renewable-energy loans were above TL340 billion. These figures show domestic banking capacity, but large projects will still require international lenders, export-credit agencies and institutional capital, particularly where imported equipment or long-dated foreign-currency funding is involved.
Climate Law, Carbon Pricing and Regulatory Credibility
Türkiye’s first Climate Law, Law No. 7552, entered into force on July 9, 2025. It established the legal basis for an emissions trading system, climate-finance instruments, provincial action plans and a broader framework for the country’s 2053 net-zero objective. The World Bank’s Partnership for Market Implementation says secondary ETS regulations were released in August 2026, with a pilot phase forming part of the transition toward a national carbon market.
The regulatory structure is becoming more detailed. Türkiye’s Green Taxonomy Regulation was published in the Official Gazette on September 24, 2026. A credible taxonomy can help banks and investors distinguish qualifying activities and reduce inconsistent labeling. Its investment value will depend on technical screening criteria, disclosure requirements, verification standards and alignment with international frameworks.
Türkiye’s second Nationally Determined Contribution, submitted to the United Nations Framework Convention on Climate Change in November 2025, commits the country to keeping 2035 greenhouse-gas emissions 466 million tonnes of carbon dioxide equivalent below a business-as-usual projection. That would limit total emissions to 643 million tonnes.
The target has drawn scrutiny because it permits emissions to remain above historical levels. Climate Action Tracker rates the NDC “critically insufficient” against pathways consistent with the Paris Agreement and calculates that the target, excluding land use and forestry, would be about 30 percent above 2018 emissions. This does not eliminate the investment case, but it creates a credibility test. Investors need confidence that future policy will be strong enough to create demand for low-carbon assets without changing abruptly after capital has been committed.
Legal and tax compliance will consequently become central to project economics. Industrial operators must prepare for emissions monitoring, verification, allowance management and potentially carbon-credit rules, while financial institutions will require defensible environmental data. Foreign investors should incorporate these obligations into acquisition due diligence and operating models rather than treating them as reporting issues to be addressed after incorporation.
The EU Carbon Border Is Accelerating Industrial Investment
European trade policy adds urgency. The European Union’s Carbon Border Adjustment Mechanism entered its definitive phase on January 1, 2026. It covers cement, iron and steel, aluminium, fertilizers, electricity and hydrogen. EU importers above the applicable threshold must report embedded emissions and surrender certificates linked to EU Emissions Trading System prices. Carbon prices already paid in the country of production can be deducted when properly demonstrated.
The European Commission identified Türkiye among the leading origins of CBAM-covered goods immediately after the definitive regime began. Research published in the Journal of International Trade Law and Policy, using TurkStat data, estimated that Türkiye exported €5.56 billion of CBAM goods to the EU in 2025. Iron and steel accounted for €2.85 billion and aluminium for €2.11 billion.
This changes the calculation for investments in Turkish industry. Renewable power purchase arrangements, electrified heat, energy-efficiency systems, lower-carbon materials and auditable emissions data can protect export competitiveness as well as reduce environmental impact. A functioning domestic ETS could also retain a portion of carbon-related revenues inside Türkiye rather than allowing the full financial adjustment to accrue at the EU border.
For foreign manufacturers, market-entry analysis must therefore consider both Turkish regulation and the rules governing the destination market. Import-export facilitation now includes emissions documentation, customs classification and coordination with EU customers responsible for CBAM declarations. A low-cost production site can lose its advantage if embedded carbon is high or data cannot be independently verified.
Blended Finance Can Move Projects Across the Bankability Gap
Multilateral institutions are already testing structures intended to attract private capital. The World Bank reported in June 2026 that a $400 million Turkish green credit line for heavy industry was on course to mobilize $443 million. Supported projects include a $5 million copper-facility upgrade expected to improve efficiency by nearly 50 percent and reduce emissions by 35 percent.
In June 2025, the World Bank also approved a €360 million guarantee for the Financing Adaptation for Growth Project. Implemented through the Industrial Development Bank of Türkiye, the program aims to mobilize up to €600 million of long-term commercial finance for companies investing in resilience. Separately, the World Bank approved $219.14 million in June 2026 for climate-smart urban infrastructure in Antalya and Konya.
These structures address risks that conventional project finance may not absorb easily. Guarantees can improve tenor and pricing, while concessional capital can finance early-stage studies or technologies with limited operating history. Project preparation remains decisive. The European Union delegation to Türkiye emphasized in August that preparation should receive the same attention as construction, with grants, loans, guarantees and technical expertise assembled before procurement begins.
The Ministry of Treasury and Finance and the United Nations signed a declaration of intent in September covering project preparation, capital mobilization, innovative finance, policy coordination and COP31 legacy work. The practical test will be whether this cooperation generates procurement-ready projects with allocated land, permits, feasibility studies, transparent revenue models and capable public or private counterparties.
What This Means for Foreign Investors
COP31 can give Türkiye’s green transition international visibility, but foreign investors should separate diplomatic momentum from project readiness. The most promising opportunities are likely to sit where policy pressure, export competitiveness and infrastructure demand overlap, including renewable generation, transmission, storage, industrial decarbonization, circular-economy systems, electric mobility and resilient urban services.
Acting on those opportunities requires a sequenced advisory process. Market-entry work should identify demand, offtakers, procurement routes and exposure to Turkish and EU carbon rules. Company incorporation and corporate structuring should reflect financing arrangements, joint-venture governance, licensing responsibilities and possible special-purpose vehicles. Investment-incentive analysis must test eligibility under Türkiye’s green-transformation, regional and project-based support systems rather than assuming all climate-branded expenditure qualifies.
Legal and tax compliance must cover permits, emissions reporting, environmental obligations, transfer pricing and the treatment of grants or carbon-related revenues. Government relations and regulatory liaison are particularly important where several ministries, municipalities, grid operators and financing institutions share authority. Import-export support is needed for equipment, localization requirements and CBAM documentation, while expo representation around COP31 and sector fairs can help investors identify partners without substituting for commercial due diligence.
Finally, project management is what converts these elements into execution. A foreign investor may have capital and technology, yet still need coordinated land acquisition, permitting, contractor supervision, incentive applications and stakeholder engagement. Türkiye’s call for stronger financing partnerships is therefore credible only if finance is matched by disciplined preparation and predictable implementation. COP31 will create a window for investment, but the projects that close successfully will be those built to remain viable after the conference itself has ended.