Economy

Danish energy firms focus on Turkey as COVID-19 disrupts supply

Two visits from Denmark to Turkey are planned in 2022 on wind energy, water, energy efficiency, Danish Consul General says

Ebru Sengul Cevrioglu   | 07.06.2021
Danish energy firms focus on Turkey as COVID-19 disrupts supply

IZMIR

More and more Danish companies are focusing on Turkey as a regional hub for sector product and equipment sourcing and exports, according to the Danish Consul General, Anette Snedgaard Galskjot, in Istanbul in an exclusive interview with Anadolu Agency.

With affordable and clean energy as a backbone of the new climate strategy of Denmark, the Danish consul general underlined the country’s firm commitment to contributing to the global sustainability and green transition agenda, and consequently for both sourcing and collaboration with countries like Turkey.

The Covid-19 pandemic has caused major disruptions in the wind industry supply chain, particularly from Asia, while new emerging markets, like Turkey, have come to the fore.

She hailed the Turkish wind industry that "has proven itself in the last decade with a steady increase of around 500 megawatts (MW) each year with an impressive growth that makes it one of the largest in Europe."

The local content rules and renewable energy incentive scheme also supported the localization of the industry to an extent "but there are still areas for further innovation, collaboration and green job creation for sure," Galskjot said.

She said the Strategic Sector Cooperation (SSC) project between Turkey and Denmark both on district heating and offshore wind could facilitate new projects between Turkey and Denmark, also attracting green finance.

"My observation is there are very serious international players in the local industry who are ready to cooperate with Danish companies," she stressed.

'Sustainable finance, laws, and regulations are critical for further investments'

The Danish consul-general said that sustainable finance, laws, regulations, and economy are critical for further investments in Turkey especially in the renewable energy sector, which she said: “is still very political and depends on incentives.”

"I see government to government projects as critical capacity-building tools between the countries and the Strategic Sector Cooperation (SSC) project in Turkey can lead to further investments and finance to Turkey in the renewable energy sector," she noted.

Denmark´s export credit agency, EKF, provides grants for feasibility studies through its EKF Green Accelerator Program from Denmark’s Exim Bank to facilitate green transition around the globe with Danish technology and expertise.

This program could be used in Turkey, she said along with contributions from the IFU, the Danish Investment Fund for Developing Countries, for more projects in Turkey.

Plans are afoot for two physical delegation visits in 2022 if the Covid-19 situation permits, one of which will focus on wind energy and the other on water and wastewater technologies and energy efficiency, which are strategic focus areas for the Trade Council of Denmark in Turkey.

'Sustainable supply chains in near markets are essential for better competition'

To date, bilateral projects and investments have mainly focused on the energy, transport, and infrastructure sectors.

Between 2002-2020, $642 million worth of Foreign Direct Investment (FDI) was made from Denmark to Turkey, whereas $25 million in FDI was realized from Turkey to Denmark, according to the Central Bank of Turkey.

Denmark’s FDI involved the $3.3 billion acquisition in 2020 of Eaton Hydraulics - a huge production facility in Turkey with 2,500 employees, by Danfoss, one of the biggest Danish conglomerates on power controls, automation, and energy efficiency in the world.

The Danish consul-general also acclaimed the entrance of LM Wind Power, the Danish multinational wind turbine rotor blades manufacturer, to the Turkish market in 2017, which she described as a breakthrough, as other Danish companies in the wind supply chain followed the original equipment manufacturer (OEM).

“We hope more to come in the new world after Covid-19 where sustainable supply chains in near markets are essential to be more competitive," she said.

Another example of partnerships in energy includes the joint venture in the wind supply chain between Turkish company Bayramoglu Insaat and Danish company Resolux Denmark for the production of wind turbine internal kits.

"Logistics and transport are also critical for the wind energy sector and the Danish shipping and logistic company DFDS’ acquisition of Turkish UN RoRo in 2018 was equal to €950 million, which was the largest FDI in Turkey that year," she added.

The Trade Council of Denmark in Turkey has also organized several wind delegations to Denmark and Turkey over the past 5 years, focusing on the MILRES project – for the production of Turkey’s first local wind turbine, Turkey’s renewable tenders (YEKA), and outsourcing opportunities in Turkey.

Strategic sector cooperation between the Danish Energy Agency and the Turkish Ministry of Energy and Natural Resources on district energy and energy efficiency and the development of the offshore wind energy market in Turkey also supports further projects, according to Galskjot.

Other projects in the pipeline involve smart urban mobility projects to be announced soon with Istanbul Metropolitan Municipality (IBB) and water and wastewater capacity building with the Marmara Union of Municipalities.

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