Consulting 0pportunities arising from renewable energy projects and municipal services
Turkey’s economy has proven resilient
According to the current assessment of the World Bank, Turkey has weathered both domestic political turbulences and the international financial and economic crisis without all too dramatic consequences for its economic statistics, thanks to the diversity of its economy and its proximity to the European markets. Although there remains an element of uncertainty at the macroeconomic level (e.g. as a result of the high budget deficit), Turkey’s economy has proven far more resilient than during the crisis in 2001.
The Austrian foreign trade office in Ankara nonetheless believes that the very high growth rates seen in Turkey (which were of the order of 7 to almost 10 percent) are now a thing of the past. As a result of the global turbulence, the state planning office expects growth rates of between 4 and 4.5 percent for 2008 and 2009. It is hard to predict for the time being what consequences this will have for economic relations between Turkey and Austria. Recent years had seen notable increases; according to the foreign trade office, Austrian exports had grown by around 60% since 2002. In the last two years, the growth in Austrian exports has reached double figures (2006: +14.4%; 2007: +11.7%). In the first half of 2008, the rate of growth was only just below this level at +9.4%. In 2007, Turkey occupied the twenty-first place on the list of Austria’s most important export destinations, one place higher than the year before. In the list of the most important importers to Austria, Turkey was in nineteenth place, its imports having grown by +7.7% compared to the preceding year. In the first half of 2008, that growth had reached +17.0%.
Austria amongst the top 10 investors
Turkey only just failed to break the 1 billion euro “sound barrier” in exports in 2008, when its exports were worth 966 million euros. The Austrian foreign trade office in Ankara however believes that “existing large-scale projects such as the 1200 MW power station Ilisu on the Tigris River and plans for further power stations are grounds for optimism” and that “bilateral trade will soon be worth 2 billion euros. As the Turkish market for projects is however subject to significant fluctuations, it is important for Austria that the service and consumer goods sectors are expanded further.”
Trade is not the only area seeing extremely positive development. Investments by Austrian firms have also increased significantly in the last few years. In the first half of 2008, Austria took a respectable sixth place in the list of the top 10 foreign direct investors, with investments worth USD 233 million. Investments from the USA are of a similar value, and the distance to Germany (fifth place) is just USD 47 million.
Chances for Austrian Consultants
Austrians are already involved in around one third of all water-related and energy projects in Turkey. Turkey’s energy providers will face great challenges both now and in the future due to the country’s positive economic growth and the high level of demand for new residential properties, which will result in an annual increase in energy consumption of around 10%. “In order to reduce Turkey’s dependency on fossil fuels, which have contributed to an explosion of the negative trade balance, the Turkish government is supporting investment in renewable energies by charging only minimal tariffs. Almost all large family businesses and prominent industrial firms in Turkey are planning not just to be self-sufficient, but also to invest in small hydroelectric plants, wind parks, and solar or geothermal power stations as an additional source of income.” This is the finding in a recent AWO branch report, which highlights investment opportunities for foreign firms arising from Turkey’s renewable energy law and includes both thorough explanations of the legal frameworks and important information about investor groups, large suppliers of electricity and existing power stations.
The European Bank for Reconstruction and Development’s decision to begin operational activities in Turkey also presents further opportunities. “The EBRD will support the private sector and reach out to areas away from the large metropolitan centres. In the first two years of operations, investment of up to US$ 600 million will focus on developing the agribusiness sector, supporting small and medium-sized enterprises, furthering privatisation, delivering municipal services effectively and promoting energy efficiency projects”. Particularly interesting is the EBRD’s 'municipal and environmental infrastructure policy (MEI)'. "The core objective of the Bank's MEI operations is to promote greater efficiency and higher quality in the provision of local authority services through investment and the promotion of independent, well-managed and financially sustainable operations provided on commercial principles and in a market-oriented institutional and regulatory framework". The water supply, wastewater, municipal transport, solid waste, and social infrastructure sectors in particular will be in focus.
The construction and automobile delivery industries are generally seen as interesting sectors in Turkey, even though it will be necessary to take account of possible consequences of the current financial and economic crisis in these fields. The markets for communication and information technology, electronics, logistics, and environmental engineering could prove very promising in the future.
AICs with experience in Türkey
Dipl.-Ing. Dr. techn. Manfred Bayerl
CALISKAN & NETWORK
Mag.Dr.rer.soc.oec. Manfred Dorner
Dr. Dorner KEG
Mag. (FH) Thomas Fritz
ILF Beratende Ingenieure ZT GmbH
Dipl. Ing A. Nesrin Göker
DI A Nesrin Göker Beratung und Projekterfüllung
Dr. Niki Harramach
Harramach & Partner
DI Gerhard Hauser Architekt
Departmentmanager Klaus Jammernegg
Mag. Konrad Noé-Nordberg
nnc Noé-Nordberg Consulting
Publications & Events Austrian Trade Commission in Ankara and Istanbul (german)
Investment Support and Promotion Agency
(Republic of Turkey Prime Minister’s Office)
Investor guide from the Investment Support and Promotion Agency