The role of banks in renewable energy finance: An analysis of Turkey

Abstract

In today’s world, global warming and environmental problems resulting from fossil waste have directed economies’ attention to renewable energy. Renewable energy has become quite important to developing countries, in particular those that depend on foreign energy sources and confront continuously increasing energy demand since they need renewable energy to be able to achieve their goal of sustainable growth and do this without destructing the environment and by reducing their foreign dependency. Higher costs of renewable energy investment when compared to traditional energy investment affect the investment made in this field, though. The fundamental problem in renewable energy investment is how to finance it as it is not economically rational to invest in sectors with high costs. This chapter explores the role of banks in financing renewable energy by focusing on Turkey.