Turkey is fast becoming a hotbed of investment for Indian public and private sector energy firms looking to expand their overseas operations to de-risk their domestic businesses hit hard by sluggish market conditions and delayed projects.

Companies such as NTPC, Powergrid, Tata Power, BHEL, OVL, JSW, Suzlon have all completed exploratory exercises to put up projects in Turkey, either on their own or in partnership with local companies, promising investments that could run into billion of dollars. ?Turkey presents a market which is similar to Indian energy market, which also faces deficits in electricity generation and depends heavily on energy imports. This has attracted a lot of interest from Indian entities that are looking for avenues to invest abroad. With an investment friendly regime, we expect a lot of this interest converting in actual investments,? said Sanjeev Kathpalia, a senior advisor at Investment Support and Promotion Agency of Turkey (ISPAT).

Turkey privatised its energy sector a few years ago, and is now devising investment-friendly policies to attract overseas invetments. The power sector is open to 100% FDI in generation, transmission and distribution. Also, the country is giving big sops by way of higher tariff for investors who set up local manufacturing facilities in the wind power segment.

Tata Power, through its subsidiary Tata Power International, is already working on developing hydro-power projects in Georgia for sale of power primarily to Turkey. It has now started exploring both lignite (coal)-based power projects and renewable energy projects in Turkey. Company managing director Anil Sardana has held talks about possible investments in power projects in Turkey.

Similarly, BHEL executives have also held discussions with Turkish officials for a possible boiler, turbine generator (BTG) factory in Turkey that will provide the company easy access to several European and Central and East Asian markets and the Middle East, where the company already has some presence. ?BHEL is facing severe problems in the domestic market, as equipment orders have remained sluggigh while payments are getting delayed from customers. This has pushed the company to explore avenues abroad and Turkey could provide an ideal investment destination with a vast domestic demand and ideal location for exports,? said a an official of heavy industries ministries.

BHEL functions under the administerative control of this ministry.

Other companies such as NTPC, JSW Energy, Reliance have also held preliminary talks for putting up power projects in thermal and renewable energy sectors.

Turkey, which has also opened up its transmission sector for private investments, is keen to forge alliance between its companies and Indian transmission major Powergrid Corporation for putting up new lines required to support the new power projects getting commissioned in the country. ?Growing domestic market, institutionalised economy, qualified and cost-effective labour are favourable to Indian companies investing in Turkey, especially in areas like infrastructure, IT, energy, food processing and manufacturing,? Kathpalia said.

Turkey needs to add over 35,000 MW of fresh capacity between now and 2023 to minimise the energy deficit it faces. This presents huge potential for Indian companies both in generation and transmission. Moreover, the country has huge deposits of lignite, which can be processed for use in thermal power plants.

On the clean-energy front, Turkey plans to have 30% of its installed capacity on renewable sources.

According to the Turkish ministry of economy, bilateral trade between the nations grew ?more than six fold between 2002 and 2010, increasing from $637 million to $4 billion?.

By 2012, this figure had reached $7.5 billion, and a goal was set between the nations to double the trade volume by 2015.