The UK’s relationship with Türkiye is going from strength to strength. They are both powerhouse economies, with a thriving bilateral trade relationship which grew by more than 30% to £23.5 billion in the year to 2022.
As a UK-based renewable energy developer, Hive Energy has been operating in Türkiye since 2015. In 2018 we completed our first project in the region, a 10.5 MW photovoltaic development. In this article, we will reflect on Hive’s experience operating in Türkiye and the trade opportunities the region offers for UK businesses.
The UK- Türkiye trade relationship
Türkiye and the UK have a longstanding trade relationship. In 2020, the UK-Türkiye Free Trade Agreement was signed, securing continuity in our trading conditions as the UK left the EU, including 0% tariffs on most goods trade. This relationship continues to thrive, and the Department for Business and Trade (DBT) recently asked businesses for views on how to update it with a call for input launching in November 2023. Now DBT has officially launched negotiations for an updated agreement with Türkiye, which will build on the existing deal to boost UK exports as more trade barriers are reduced.
Considerations for UK businesses
Türkiye offers immense potential for UK investment and trade. But, for any organisations considering expanding to the region there are some considerations that should be made to nurture success.
Understanding the area and gaining insight into Türkish laws and regulations, market conditions, import/export requirements, and business practices will help create a successful transition. It would also be advisable to take counsel on the taxation position and be aware of currency considerations as accounting regulations in some areas are completely different to the UK. Hive’s Country Manager in Türkiye lives in the region and has strong partnerships and connections, as well as extensive knowledge of the country, that allow us to navigate the market effectively. An upgraded UK-Türkiye FTA could help businesses looking to expand into Türkiye by increasing transparency and simplifying paperwork.
Renewable energy opportunities
For renewable energy companies there is huge growth potential as Türkiye has committed to green energy adoption to stabilise its current deficit. Its National Energy Plan for 2035 laid out ambitious plans to grow solar capacity by five times in line with goals to reach net zero gas emissions by 2053. Expanding to Türkiye has allowed Hive to play a meaningful role in Türkiye’s strategy on independent electricity supply, as well as supporting the overall net-zero transition.
Conclusion
There are many exciting prospects when considering entering new markets in Türkiye. Hive is particularly excited about the country’s strong leading position in both the Middle East and Central Asia, which will open further business and growth opportunities.
The Türkish market is growing tremendously and the thriving trade partnership with the UK strengthens the appeal for UK businesses. While there are considerations UK businesses should be mindful of before jumping into the Türkish market, the opportunities are vast.
