Articles

PPPs in the International Realm: IGAs and HGAs Facilitate the Recent Nuclear Energy Projects Inspired by the BTC Pipeline Model

Domestic privatization efforts go hand in hand with private international law when attracting foreign investment in the types of large scale-energy projects Turkey and the surrounding region demand.

In the past few decades, Turkey’s rapid urbanization has prompted the economy’s shift from agriculture to industry, and the attendant social and economic advancement has fueled a remarkable rise in national energy demand and consumption. Along with a rapidly increasing demand, supply security concerns have also become increasingly important. Furthermore, energy-dependence has increased, so the diversification of energy resources, like the use of nuclear energy, has become a key consideration for Turkey.

  It would be a misunderstanding of Turkey’s tendencies for the past four decades to expect this volume and diversity to be provided by the state alone. It is crucial for private enterprise to play a major part in delivering on this desideratum. As the rest of this Newsletter sets out in detail, PPP models have successfully helped to deliver private-sector investment in a number of industries, and are rightly lauded as having helped to transform the Turkish economy. As successful as these structures may be however, they may at times prove inadequate when the involvement of international partners is required, which is not the question that the PPP legislation was designed to answer. International involvement may be necessary because the project in consideration is, by its very nature, an international undertaking, or where Turkey as a nation simply does not have the necessary know-how to attain the desired outcome. In such cases, the Turkish government has resorted to signing intergovernmental agreements (“IGA”s) to secure the necessary cooperation from partner governments.