RULES AND PROCEDURES ESTABLISHED FOR SHARE TRANSFERS BY PRELIMINARY LICENCE HOLDERS IN THE ELECTRICITY MARKET
The Energy Market Regulatory Authority (“EPDK”) published in Official Gazette No. 32688 dated 10/10/2024 an amendment to the Electricity Market Licensing Regulation (“Licensing Regulation”), requiring each direct shareholding change and indirect ownership change of 10% or more involving licence holders to be approved by the Energy Market Regulatory Board (“Board”).
Board Decision No. 12993 dated 07/11/2024, published in Official Gazette No. 32717 dated 09/11/2024 (“Board Decision”), established approval procedures for share transfers under Article 57(1)(c) of the Licensing Regulation resulting in a new indirect shareholder through a change of 10% or more, and planned transfers under subparagraph (ı).
This briefing examines licence holders’ obligations concerning share transfers under the Board Decision.
I. Scope
The Board Decision covers the following share transfers:
i. Changes in a preliminary licence holder’s ownership structure resulting in a new indirect shareholder because of changes in the ownership structures of shareholders established abroad; and
ii. Changes involving direct or indirect acquisitions in a preliminary licence holder by legal entities established abroad, or entities established under Law No. 6102 but controlled by foreign-established entities.
These transactions fall within the Board Decision.
Article 6 also covers approvals for direct or indirect shareholding changes in favour of foreigners that do not change control of the preliminary licence holder.
II. General Principles
Within six months of notification of approval, the market participant must submit documents to the Board showing that, irrespective of the percentage transferred, paid-in capital has been increased by an additional 25% of the total investment amount relating to the primary energy source.
Article 2 specifies the following unit investment amounts for the primary source when calculating paid-in capital:
| Primary energy source | Unit investment amount (TL/MWm) |
|---|---|
| Wind | 35.000.000,00 |
| Solar | 18.000.000,00 |
| Hydropower | 35.000.000,00 |
| Geothermal | 50.000.000,00 |
| Biomass | 50.000.000,00 |
| Natural gas / LPG | 18.000.000,00 |
| Fuel oil / naphtha | 18.000.000,00 |
| Coal | 35.000.000,00 |
| Other | 50.000.000,00 |
Proof that the required paid-in capital has been funded from abroad is among the Board’s approval conditions.
III. Sanctions
Under Article 4, if the approved share transfer occurs but the capital increase is not completed within the prescribed period, approval is deemed invalid and the preliminary licences are revoked. They are also revoked if paid-in capital falls below the required amount before a generation licence is obtained.