The World Bank has agreed to provide two $300m loans to the Government of Turkey to support the country’s Geothermal Development Project. The loans will support renewable energy development by drawing from heat sources located deep in the ground.

Turkey’s geothermal power plants make use of subterranean heat to drive turbines that generate electricity.

World Bank Turkey country director Auguste Kouame said: “The World Bank is pleased to be a partner of the Government of Turkey in the energy transition effort and the scaling-up of geothermal capacity in particular.

“Increasing renewable energy generation capacity is critical to achieving energy security and climate change mitigation in Turkey. In addition, attracting climate-friendly investment is crucial in Turkey’s energy transition.”

The World Bank loans, combined with grants, are intended to allow the Geothermal Development Project to attract more private investment in Turkey’s geothermal energy segment by minimising risks for investors through a risk-sharing mechanism.

The loans are an addition to two initial $250m loans and are complemented by a $39.8m grant from the Clean Technology Fund and an Energy Sector Management Assistance Programme grant of $350,000.

Geothermal Development Project team leaders Almudena Mateos Merino, Ayse Yasemin Orucu and Manuel Berlengiero said that the two new loans for the project are estimated to fund more than 380MW of geothermal capacity. They added that the loans are expected to mobilise around $555m of private capital and support Turkey’s commitment to offsetting 30 million tonnes of carbon emissions over the lifetime of the geothermal projects.

In addition, the financing will be used to fund electricity generation in Turkey, as well as capacity drilling, steam-field development and geothermal direct-use applications. In September, the World Bank agreed to offer a $380m loan for the development of Indonesia’s first pumped-storage hydropower plant.