Türkiye and the World Bank on Thursday signed an agreement for a $1 billion program to accelerate expansion of renewable energy.

The program will help establish and expand Türkiye's market for distributed solar energy and pilot a program for battery storage, the bank said in a statement.

The financing comprises loans of about 600 million euros (about $657 million) from the International Bank of Reconstruction and Development, $30 million from the Clean Technology Fund, and $3 million in grant funding from the World Bank's Energy Sector Management Assistance Program.

The program is also expected to mobilize $259 million of private capital.

The Development and Investment Bank of Türkiye (TKYB) and Industrial Development Bank of Türkiye (TSKB) will be implementing the program, the bank said.

The results-based financing program – the first of its kind in Türkiye – will disburse World Bank funds as pre-agreed results are reached and independently verified.

TKYB and TSKB will develop Türkiye's distributed energy market in two stages.

They will lend directly to private developers of rooftop and ground-mounted solar investments targeted at commercial and industrial customers.

Secondly, they will support other local commercial banks or leasing companies to provide similar loans for solar developers.

"The program will, thus, develop an increasingly diverse market of financing sources to scale up distributed solar," the bank said.

The country aims to significantly scale up solar energy to 52.9 gigawatts (GW) by 2035 from 9.5 GW in 2022, while the target for battery storage is 7.5 GW.

"The World Bank welcomes the commitment to double renewable energy by 2035 and is delighted to accompany the country in its efforts to achieve energy security, lower energy costs for consumers, and fight climate change with projects like the one we have just signed today," said Humberto Lopez, World Bank country director for Türkiye.

"In addition to meeting the rising demand for electricity, the program will accelerate the next phase of market development, establishing a foundation for the evolution to a mature market for distributed solar energy and storage solutions capable of attracting private investment and ultimately functioning with reduced public or concessional support," Manuel Berlengiero, the World Bank lead energy specialist for the program, was quoted as saying in the press release.