Public Finance and Private Exploration in Geothermal: Gümüşköy Case Study Turkey

This case study examines the role of public finance in mitigating early-stage exploration risks for geothermal energy, focusing on the Gümüşköy Geothermal Power Plant in Turkey as the first instance of private sector financing for an unproven field in the country.

• Global geothermal development is hindered by high early-stage exploration costs and risks, with exploration costs reaching up to 15% of total capital costs and well success rates estimated between 50-59%. Despite this, 90% of multilateral public finance globally has targeted later project stages rather than early-stage risks.
• Turkey experienced rapid geothermal growth, increasing installed capacity from 30MW in 2008 to 405MW by the end of 2014, representing a compound annual growth rate of 54%. While the government target is 1GW by 2023, the country's estimated potential is 4.5GW, which could meet 8% of overall demand in 2030.
• Historically, Turkey's geothermal development relied on the government demonstrating resource suitability before tendering; until 2013, 11 of 12 projects followed this model. The government has since reduced its drilling activity to encourage more private sector investment.
• The 13.2MW Gümüşköy Geothermal Power Plant, commissioned in 2013 by BM Holding, represents the first case in Turkey where the private sector financed exploration of an unproven field. BM Holding invested USD 12m (24% of total costs) in exploration before securing USD 34.5m in debt from Yapikredi, which utilized USD 24.9m from the EBRD-managed Medium Size Sustainable Energy Finance Facility (MidSEFF). Financial viability was supported by a ten-year government feed-in tariff.

APA

Climate Policy Initiative (2015). Public Finance and Private Exploration in Geothermal: Gümüşköy Case Study Turkey. https://www.climatepolicyinitiative.org/publication/public-finance-and-private-exploration-in-geothermal-gumuskoy-case-study-turkey/

Chicago

Climate Policy Initiative. Public Finance and Private Exploration in Geothermal: Gümüşköy Case Study Turkey. 2015. https://www.climatepolicyinitiative.org/publication/public-finance-and-private-exploration-in-geothermal-gumuskoy-case-study-turkey/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Public Finance and Private Exploration in Geothermal: Gümüşköy Case Study Turkey |date=2 March 2015 |url=https://www.climatepolicyinitiative.org/publication/public-finance-and-private-exploration-in-geothermal-gumuskoy-case-study-turkey/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2015public, author = {{Climate Policy Initiative}}, title = {{Public Finance and Private Exploration in Geothermal: Gümüşköy Case Study Turkey}}, institution = {Climate Policy Initiative}, year = {2015}, month = mar, url = {https://www.climatepolicyinitiative.org/publication/public-finance-and-private-exploration-in-geothermal-gumuskoy-case-study-turkey/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }