Mergers And Acquisitions Of Companies Engaged In Renewable Energy Gereration 11 August 2025

In recent years, notable developments in Turkey's electricity market have extended beyond investments aimed solely at increasing generation capacity. The sector has also come into focus through strategic investments and merger and acquisition (M&A) transactions involving companies operating in the field of renewable energy. Particularly in the case of solar power plants ("SPP"s) and wind power plants ("WPP"s), merger and acquisitions transactions  within the renewable energy generation sector has gained significant atraction, driven by government policies and growing interest from international investors. As a result, investors seeking to enter into the renewable energy market today are not only interested in establishing new generation facilities, but also in directly or indirectly acquiring shares in companies that already hold renewable energy generation licenses or have obtained approvals for unlicensed electricity generation.
 

In this context, the Energy Market Regulatory Authority ("EMRA") acts not only as a technical regulatory body that issues licenses, but also as an authority that shapes energy investments, oversees the legal compliance of strategic partnership structures, and regulates capital movements between energy companies. This newsletter will examine the regulatory role of EMRA in merger and acquisition transactions within the renewable electricity generation sector, within the framework of the applicable legislation.
 

General Regulatory Framework
 

According to the Law numbered 5346 on the Utilization of Renewable Energy Resources for the Purpose of Generating Electrical Energy, renewable energy resources ("RER") refer to "non-fossil energy sources such as hydraulic, wind, solar, geothermal, biomass, wave, current, and tidal energy." These renewable energy resources are generally used for the purpose of electricity generation.
 

The general principles regarding electricity generation are regulated under the Electricity Market Law numbered 6446 ("Electricity Market Law"). Pursuant to the Electricity Market Law, a license is required in order to carry out activities such as generation, transmission, and distribution, as specified therein. The procedures and principles related to pre-licensing and licensing practices in the electricity market are further detailed in the Electricity Market Licensing Regulation ( "Licensing Regulation").
 

However, Article 14 of the Electricity Market Law exempts certain activities from the licensing requirement, and the regulation of these activities is governed by the Regulation on Unlicensed Electricity Generation in the Electricity Market ("Unlicensed Electricity Generation Regulation").
 

a) Mergers and Acquisitions in Licensed or Pre-Licensed Renewable Electricity Generation Companies

As mentioned above, except for the exceptional cases listed in Article 14 of the Electricity Market Law, legal entities wishing to operate in the electricity market are required to obtain a license from EMRA within the scope of their intended activities. For example, a legal entity intending to establish a wind power plant and engage in generation activities must first apply to the EMRA to obtain a license.
 

A legal entity applying for a generation license is initially granted a time-limited pre-license by EMRA to enable it to obtain the necessary permits, approvals, licenses, and similar documents required by legislation, and to secure ownership or usage rights of the site where the generation facility will be established.
 

Until the license is obtained, except for exceptions specified in the Licensing Regulation, if there is a direct or indirect change in the shareholding structure of the legal entity holding the pre-license, a transfer of shares or transactions resulting in the transfer of shares, or failure to fulfill obligations determined by EMRA, the pre-license shall be revoked.
 

According to Article 57 titled "Transfer of Shares" of the Licensing Regulation,
 

Until the license is obtained, except in cases of inheritance and bankruptcy, the legal entity holding the pre-license shall not undergo a direct or indirect change in its shareholding structure, nor shall there be any transfer of shares or transactions resulting in the transfer of shares.
 

The exceptional cases to this rule are as follows:
 

1. Changes in the shareholding structure arising from the publicly traded shares of publicly held legal entities and legal entities that have a publicly held legal entity as a shareholder, limited to their publicly traded shares,
 

2. Legal entities granted pre-licenses for facilities envisaged to be established under international agreements,
 

3. Indirect changes in shareholding of pre-license holders resulting from changes in the shareholding structure of foreign shareholders, provided that such changes do not constitute a change of control,

4. Direct or indirect changes in the shareholding structure of the pre-license holder legal entity arising from the public offering of shares of the pre-license holder or its direct or indirect legal entity shareholders,

5. Direct or indirect changes in the shareholding structure of the pre-license holder legal entity resulting from changes in shareholding among existing shareholders due to the exercise of pre-emptive rights, provided that such changes do not constitute a change of control,

6. Changes resulting in all indirect shareholders of the pre-license holder becoming direct shareholders without changing their share ratios, and changes resulting in all direct shareholders becoming indirect shareholders without changing their share ratios,

7. Changes in the direct or indirect shareholding structure of the pre-license holder legal entity due to the sale or transfer of shares held by the public in a pre-license holder included in a privatization program,

8. Direct or indirect share transfers in the pre-license holder's shareholding structure that do not constitute a change of control,

9. Direct or indirect changes in the shareholding structure of pre-license holders whose more than half of the capital is directly or indirectly owned by public institutions and organizations, provided that no new shareholders other than those with the status of public institutions are introduced, resulting from capital increases and/or changes in shareholders,
 

10. Direct or indirect changes in the shareholding structure of the pre-license holder and its direct and indirect legal entity shareholders arising from the acquisition of their own shares in accordance with the provisions of Turkish Commercial Code numbered 6102,

11. Direct or indirect share acquisitions in the pre-license holder legal entity by foreign-established legal persons or legal persons controlled by them, or by legal persons established under Turkish Commercial Code numbered 6102 using foreign resources,

12. Direct or indirect changes in the shareholding structure of the pre-license holder legal entity resulting from share transfers between real persons who are spouses or first-degree relatives,

13. Direct or indirect changes in the shareholding structure of the pre-license holder legal entity under the management of the Savings Deposit Insurance Fund,

14. Direct and/or indirect changes in the shareholding structure of the pre-license holder legal entity in pre-licenses granted for Renewable Energy Resources.
 

? However, except for the exceptional cases listed in items 1, 2, 4, 7, 13, and 14 above, any planned direct share transfers and indirect changes in the shareholding structure of 10% or more are subject to EMRA's approval each time.
 

Although not subject to EMRA approval, the aforementioned changes must be notified to EMRA by the pre-license holding companies within six months from the date the change is made, through the EMRA Application System.

For license holders not subject to tariff regulation, shareholding structure changes falling within the scope of paragraph 2 of Article 57 must be notified to EMRA through the EMRA Application System within six months from the date the changes occur.

? According to Article 27, Paragraph 6 of the Electricity Market Law, production licenses granted for Renewable Energy Resources (RERs) shall be revoked if, before the generation facility becomes operational, the license holder's shareholding structure is, directly or indirectly changed, shares are transferred, or any transactions resulting in share transfers such as mergers or de-mergers are carried out without obtaining written approval from the Ministry.
 

b) Mergers and Acquisitions in Renewable Electricity Generation Companies Authorized for Unlicensed Electricity Generation

Article 14 of the Electricity Market Law is listing the activities exempt from the licensing obligation. Accordingly, renewable energy generation facilities with an installed capacity of up to one megawatt, or facilities that consume all the energy they generate without feeding it into the transmission or distribution system and where generation and consumption occur at the same metering point, are permitted to generate electricity without obtaining a license.
 

? According to Article 37 of the Regulation on Unlicensed Electricity Generation, for wind and solar energy generation facilities within the scope of renewable energy generation facilities with a maximum installed capacity of one megawatt, share transfers are prohibited by EMRA from the application date until the provisional acceptance of all generation facilities subject to the application is completed, except for exceptions specified in the regulation. If a share transfer occurs, the connection agreement call letter belonging to the relevant legal entity will be canceled.
 

The exceptions to this rule are as follows:

1. Changes in the shareholding structure arising from publicly traded shares of publicly held legal entities and legal entities that have a publicly held legal entity as a shareholder, limited to the publicly traded shares of such shareholders,
 

2. Direct or indirect changes in the shareholding structure of the relevant legal entity resulting from changes on the shareholding structure among existing shareholders due to the exercise of pre-emptive rights,

3. Indirect shareholding changes in the relevant legal entity resulting from changes in the shareholding structures of foreign shareholders,

4. Direct or indirect changes in the shareholding structure of the relevant legal entity arising from the public offering of shares of the relevant legal entity or its direct or indirect legal entity shareholders,

5. Direct or indirect share transfers among existing shareholders holding shares in the unlicensed generation facility owner legal entity, provided that such transfers do not result in a change of control in the legal entity's shareholding structure,

6. Direct or indirect changes in the shareholding structure of the unlicensed generation facility owner legal entity resulting from share transfers between spouses or first-degree relatives holding shares in the legal entity.

In conclusion, renewable energy investments, including mergers and acquisitions in this sector, are becoming increasingly attractive to both domestic and foreign investors. However, the success of M&A transactions in both licensed and unlicensed generation companies depends not only on commercial strategies, but also, in full compliance with EMRA regulations.
 

Therefore, it is of great importance for investors and companies planning merger and acquisition transactions in the energy sector to conduct a multidimensional assessment of technical, legal, and regulatory risks, and to coordinate with competent authorities at an early stage. Otherwise, investment processes may be halted or face the risk of complete cancellation.
 

Particular attention must be paid to carefully evaluating the provisions requiring EMRA approval and meticulously managing the process in share transfers or changes in the shareholding structures of companies at the pre-license and license stages.