Türkiye’s call for stronger partnerships among governments, banks and international investors ahead of COP31 reflects a practical challenge at the heart of climate diplomacy: converting national commitments into projects that can obtain permits, secure long-term financing and produce measurable returns. With the UN climate conference scheduled for 9 to 20 November 2026 in Antalya, Ankara is seeking to use its presidency not only as a diplomatic platform, but also as a catalyst for foreign direct investment in renewable energy, electricity networks and industrial decarbonisation.
From Climate Commitments to Bankable Projects
At the Investment Summit Towards COP31 in Istanbul on 23 October, Halil Hasar, Türkiye’s chief climate diplomacy officer and head of climate change at the Ministry of Environment, Urbanisation and Climate Change, said the country wanted negotiations to progress from dialogue to consensus and then to action. Anadolu Agency reported that the event was organised by the Presidency’s Investment and Finance Office and the International Investors Association, known as YASED.
The emphasis on implementation is significant. The Paris Agreement has generated national targets, but many emerging markets still lack sufficiently developed project pipelines, risk-sharing mechanisms and regulatory certainty to mobilise private capital at the required scale.
YASED Chairman Ali Fuat Orhonoğlu told the summit that developing countries face an annual sustainable-development investment gap of about $4 trillion, with roughly half connected to the energy transition. YASED, which represents 280 companies from 35 countries, argues that international investment can bring technology and operating expertise as well as financing. Orhonoğlu nevertheless cautioned that predictable investment conditions, modern infrastructure and reforms would determine whether COP31 produces lasting results.
That distinction matters for investors. A national target is not, by itself, an investable proposition. Capital providers need identifiable sites, grid capacity, credible offtakers, enforceable contracts, transparent tariff or auction mechanisms and reliable data on emissions and operating performance.
Türkiye’s role as host may help bring ministries, development banks, commercial lenders and project sponsors into the same process. The official COP31 programme designates 13 November for finance and trade and 19 November for implementation, investment-ready projects and access to finance. The conference’s effectiveness for FDI will therefore be judged partly by the number and quality of projects that move beyond memoranda and political announcements.
A Large Renewable-Energy Pipeline, With Grid Constraints
Türkiye’s headline objective is to reach 120 gigawatts of combined wind and solar capacity by 2035. The Ministry of Energy and Natural Resources says installed capacity reached 127.4 GW across all technologies by the end of September 2026. Solar represented 22.2 percent and wind 12.2 percent of that total.
The growth trajectory is substantial, but the generation mix still illustrates the scale of the transition. Ministry data show that coal supplied 33.3 percent of electricity generation in 2025 and natural gas another 22.3 percent. Solar accounted for 11.9 percent, wind 10.8 percent and hydropower 15.7 percent. Gross electricity consumption increased 3.2 percent to 364.8 terawatt-hours during the year and is projected to reach 510.5 terawatt-hours by 2035.
Türkiye must therefore add low-carbon capacity quickly enough to meet rising demand while also reducing the emissions intensity of the existing system. Energy Minister Alparslan Bayraktar said in May 2026 that the government intended to hold Renewable Energy Resource Area, or YEKA, tenders for at least 2 GW annually. The government is also preparing its first offshore-wind YEKA tender and targets 5 GW of offshore capacity by 2035.
Foreign capital is already entering through government-backed arrangements. In February, Türkiye signed investment and electricity-purchase agreements for two Saudi-backed solar plants in Sivas and Karaman Taşeli. The Ministry of Energy valued the 2 GW package at approximately $2 billion and said the broader intergovernmental programme could reach 5 GW. The initial projects carry a 50 percent local-content target, an important condition for equipment sourcing and procurement strategies.
Grid availability may prove as important as generation finance. In August 2025, the World Bank approved a €625 million loan, a €32.8 million Clean Technology Fund loan and a $2 million grant for Türkiye’s transmission system. According to the World Bank, the programme will finance substations, transmission lines, underground cables and digital control systems, directly enabling 1.7 GW of additional renewable capacity.
For an international developer, market entry consequently requires more than selecting a high-resource wind or solar location. It involves analysing connection rights, land status, environmental approvals, storage requirements, auction rules, local-content obligations and the credit structure of the power-purchase arrangement. Incorporation and corporate structuring must also account for project-finance security, foreign-currency exposure and the relationship between a Turkish project company and its international sponsors.
Climate Law and Carbon Pricing Reshape Industrial Investment
The investment case extends well beyond electricity generation. Türkiye’s first Climate Law entered into force on 9 July 2025, establishing the legal basis for a national emissions trading system and new climate-governance arrangements.
The Emissions Trading System Regulation published on 27 August 2026 covers permitting, allowance allocation, emissions monitoring, reporting, verification and market oversight. Subsequent implementation rules provide for a pilot covering 2026 and 2027 emissions from qualifying electricity, cement, iron and steel, aluminium and fertiliser installations. Facilities report during 2026, while allowance-surrender obligations begin for 2027 emissions.
This creates a new compliance and investment-planning environment. Acquiring an industrial business or building a greenfield plant now requires due diligence on emissions permits, historical data quality, future allowance exposure and capital expenditure needed to reduce carbon intensity. The cost of compliance will depend on detailed allocation rules, benchmarks and eventual carbon prices, some of which remain subject to implementation experience.
The timing is closely connected to European trade policy. The European Commission says the definitive phase of the EU Carbon Border Adjustment Mechanism began on 1 January 2026. It covers specified cement, iron and steel, aluminium, fertiliser, electricity and hydrogen products. EU importers must report embedded emissions and surrender certificates linked to EU Emissions Trading System prices, although eligible carbon prices paid in the producing country may be deducted.
The Central Bank of the Republic of Türkiye reported in its February 2026 Inflation Report that CBAM products represented 10.1 percent of Türkiye’s exports to the EU in 2025. The European Commission separately found that Türkiye supplied about 12 percent of the total mass of goods declared under CBAM between the fourth quarter of 2023 and the second quarter of 2025, making it one of the EU’s largest external suppliers of covered products.
Carbon measurement is therefore becoming a commercial requirement rather than a sustainability exercise. Exporters will need verifiable plant and product-level data, while investors must assess whether renewable electricity contracts, energy efficiency, electrification, recycled inputs, green hydrogen or carbon capture can preserve market access and margins.
Financing Is Expanding, but Risk Allocation Remains Critical
Ziraat Bank Chief Executive Alpaslan Çakar told the Istanbul summit that Turkish banking-sector loans to energy had exceeded TL1 trillion. Project-finance exposure to energy investments surpassed TL695 billion, while renewable-energy lending topped TL340 billion, according to figures he cited.
These totals show that domestic banks already play an important role, but they do not eliminate currency, refinancing and construction risks. Renewable projects may earn lira-denominated or regulated revenues while relying on imported equipment and foreign-currency debt. Industrial decarbonisation investments can also have long payback periods and may not generate a separate revenue stream, even when they are necessary to retain export customers.
Blended finance can help close that gap. The Türkiye Industrial Decarbonisation Investment Platform, led by the Ministry of Industry and Technology with international financing partners, targets €5 billion of investment by 2030. Its initial priorities are steel, cement, aluminium and fertiliser, with financing directed toward renewable electricity, energy efficiency, green hydrogen, carbon capture and climate technologies.
Public incentives are another part of the capital stack. Türkiye’s restructured investment incentive system took effect under Presidential Decree No. 9903 in May 2025. UNCTAD says qualifying projects can receive measures including machinery-related VAT and customs exemptions, tax reductions, social-security support, financing-cost assistance and land allocation. Green and digital transformation investments fall within the strategic programme architecture.
Eligibility, however, is project-specific. Investors must determine whether a proposed technology, location and expenditure category meet current rules, whether multiple support instruments can be combined, and what performance or reporting commitments follow. Locating and securing investment incentives is therefore inseparable from tax modelling, procurement planning and project management.
COP31 Is Also an FDI Credibility Test
Türkiye attracted $13.1 billion in FDI during 2025, a 12.2 percent annual increase, according to Central Bank data cited by the Presidency’s Investment and Finance Office. Manufacturing accounted for 31 percent of inflows, while FDI excluding real estate reached $10.7 billion, its highest level in a decade, Treasury and Finance Minister Mehmet Şimşek said.
COP31 gives Türkiye an opportunity to redirect more of that capital toward productive, low-carbon assets. It also raises expectations. Investors will compare conference announcements with the speed of licensing, grid connections, incentive approvals and secondary climate regulation after delegates leave Antalya.
The World Bank’s country climate analysis estimated that Türkiye would need an additional $68 billion of investment over 2022 to 2030 to follow a resilient, net-zero pathway. It also estimated a net economic gain of $15 billion over the same period, largely from lower fuel imports and reduced air pollution. The potential benefit is credible, but the sequencing of investment and policy remains decisive.
The unusual COP31 governance arrangement adds another dimension. Türkiye will host the conference and lead its action agenda, while Australian Climate and Energy Minister Chris Bowen will chair the formal negotiations. That division emerged from a compromise reached at COP30. It could broaden the conference’s diplomatic reach, particularly toward Pacific countries, but will require close coordination if political agreements are to feed into investment initiatives.
What This Means for Foreign Investors
COP31 is likely to produce opportunities across renewable generation, storage, transmission technology, industrial equipment, carbon services, green finance and climate-resilient infrastructure. The most attractive projects will be those that combine policy relevance with credible revenues, available grid or logistics capacity, measurable emissions reductions and a realistic permitting timetable.
Foreign investors should begin with sector-specific market-entry analysis rather than treating the green transition as a single market. A solar developer, industrial equipment supplier and low-carbon materials producer face different licensing authorities, customers, local-content expectations and financing structures.
Once an opportunity is identified, incorporation and corporate structuring should align ownership, debt security, technology licensing and tax treatment with the project’s operating model. Investment-incentive work must be conducted early enough to shape site selection and eligible expenditure, not added after procurement decisions have been made.
Legal and tax compliance now includes Climate Law obligations, emissions reporting, the Turkish ETS, sustainability disclosures and EU CBAM data where exports are involved. Government relations and regulatory liaison are important for understanding secondary rules, coordinating with ministries and resolving the interfaces among environmental, energy, industrial and municipal approvals.
Companies seeking partners or visibility during COP31 may also require expo representation and structured follow-up with financiers, suppliers and public institutions. Import-export facilitation will matter where specialised equipment is sourced abroad or Turkish production enters EU value chains. Finally, on-the-ground project management is needed to convert a conference announcement into land acquisition, permits, construction, commissioning and verified operating performance.
Türkiye’s message before COP31 is that climate finance must move from pledges to implementation. For investors, the test is equally concrete: whether policy targets can be translated into projects whose regulatory, commercial and execution risks are understood well enough for capital to commit.