The plant is set to come online by 2022 | Credit: iStock
Major new renewables deal announced as UKEF confirms major overhaul of its guarantee policy to help drive green investment
The UK's export credit agency has announced it is to provide £217m to support the construction of Turkey's largest solar project, a 1.35GW plant that aims to provide up to two million households with clean energy.
Unveiling the deal yesterday, UK Export Finance said its backing for the Karapinar solar project was the largest-ever guarantee it has provided for a solar project. It also noted the scheme would help support more than 100 British jobs, given the involvement of UK-based firms in the project.
The solar facility, which is being developed by Turkish renewable energy company Kalyon Energji, is part of the first solar tender launched by the Turkish energy ministry. It is expected to come online in late 2022.
The deal will enable US clean energy infrastructure financier GE Energy Financial Services to deploy its 'Flexinverter' solar technology at the site.
Trade Secretary Anne-Marie Trevelyan said the deal was part of the government's drive to put "UK at the heart of the global green energy transition" while opening up export opportunities for UK businesses.
"Firm action from the UK alone is not enough to fight the climate crisis," she said. "UKEF's financing encourages other countries to invest in renewable energy and opens new markets for UK businesses that will power a recovery underpinned by green jobs."
At the COP26 Climate Summit, the UK committed to align all public funding towards the clean energy transition and away from unabated fossil fuels, rallying dozens of countries behind a pledge to eliminate international fossil fuel finance by 2022.
Guto Davies, global public capital leader at GE Energy Financial Services, said the under contruction Karapinar plant was "one of Turkey's most significant renewable projects".
"Our relationship with UKEF enables us to offer GE customers access to diversified and competitive financing for GE projects that deliver sustainable, reliable and affordable energy," he added.
The funding arrangement was unveiled on the same day that UKEF announced a shakeup of its export strategy, which will see it enhance its offering for "clean growth exporters".
The government said it had simplified its Export Development Guarantee (EDG) scheme - which helps UK exporters access loan facilities - to drive investment in the global green economy, provide better support for small and medium sized enterprises, and entice more foreign businesses to the UK.
Under the new rules, businesses that do not currently export but have export potential can now tap the EDG. UKEF predicted the change would encourage companies operating in sectors in which the UK does not yet have a strong presence, such as electric vehicle battery production, to set up shop in the country.
UKEF said it would also offer the EDG on "extended repayment terms" to UK green economy exporters who need to access significant working capital to grow their businesses.
"Our improved terms for clean growth exporters will help them seize new export opportunities and invest to grow their international business - spurring on the development of the British supply chain in high growth sectors too," Trevelyan said. "With these changes, UKEF has the tools to help us deliver a greener future and a trade-led recovery."
