Turkey holds great economic importance for Germany through bilateral trade and as a production base, German Ambassador to Turkey Martin Erdmann told Anadolu Agency on Monday.
Erdmann’s comments come prior to the upcoming two-day visit to Ankara on Thursday of a 100-member delegation of German businesspeople, including 35 representatives from the country’s leading companies, headed by Economy and Energy Minister Peter Altmaier.
Two important meetings are planned as part of the visit, one of which is a Turkey-Germany Joint Economic and Trade Commission (JETCO) meeting that will be held for the first time. The following day, an energy forum hosted by Turkish and German energy ministers will take place, according to Erdmann.
“This visit should be regarded as a step to solve the current economic issues between the two countries,” Erdmann said, adding that the meetings in Turkey would also allow for discussions in bilateral relations as well as ensure that German firms can convene with Turkish government officials.
Relations between Ankara and Berlin suffered several setbacks over the past years, but both sides have taken steps in recent months towards improving ties.
Turkish President Recep Tayyip Erdogan said in a Twitter post following his recent visit to Germany: “We want our German friends to continue reposing trust in Turkey, the Turkish economy and our country’s future.”
Erdogan paid a high-profile state visit to the country on Sept. 27-29, where he met his German counterpart Frank-Walter Steinmeier, German Chancellor Angela Merkel, and received senior representatives of Germany’s largest companies and banks.
Erdmann explained that he witnessed firsthand the “close and intense” bilateral relationship between the two countries during Erdogan’s meetings.
The German ambassador described Turkish-German relations as “unique” given that such close relations are not seen with any other countries that are so geographically distant or that have such diverse cultural and geopolitical backgrounds.
There are currently 3.5 million Turkish people living in Germany and some 90 thousand Turkish businesses are located there. On the German side, the 7.2 thousand German businesses in Turkey, including Bosch, Siemens, and Mercedes, produce in Turkey and export worldwide, Erdmann noted.
“For example, Bosch Turkey exports nearly 65 percent of its products, employs 17 thousand people and has an annual return of €3.7 billion (approx. $4.24 billion). Bosch Turkey’s exports comprise 1.5 percent of all Turkey’s exports,” he said.
Such trade volumes exemplify how Germany and Europe see Turkey as a production center and [export] base, Erdmann noted, adding that the country is an integrated part of Germany’s trade relations with Europe and its added value system.
“The trade volume has shown an upward trend in recent years and reached €37 billion (approx. $42 billion) in 2017. But what makes 2017 special is that Turkey’s exports to Germany showed increases to a considerable extent,” he added.
The future is in renewables
The German ambassador deems energy a critical part of German firms’ growth strategy in Turkey.
He considers that Turkey and Germany, both coal-rich but poor in oil and gas resources, have parallel approaches to energy investments through renewables.
“I believe Germany and Turkey’s future is in renewables especially as a country that has a vast land area with coasts to two big seas,” he said.
He also cited that Turkey’s big potential in both onshore and offshore renewable sources ensures that both countries have framework conditions to develop cooperation in the energy field.
German-Spanish company Siemens Gamesa has installed wind turbines with over 700 megawatts (MW) of capacity in Turkey since entering the country’s market for the first time in 2010.
A Turkish-German consortium comprising Kalyon, Turkerler, and Siemens Gamesa, won Turkey’s first one-gigawatt wind tender in August last year. The winning bid broke a world record with the lowest cost of electricity per hour accepted from wind power generation. The offered price was $3.48 per kilowatt-hour.
Siemens Gamesa is now preparing to build a €70 million (approx. $80 million) wind power plant in Izmir’s Aliaga district.
As part of Turkey’s aim to increase its renewables capacity, the country is planning more renewable tenders this year and in the following years.
By the end of the year, the country will offer four 250 MW Renewable Energy Resources Zones (YEKA) wind energy tenders for plants to be located in Balikesir, Canakkale, Aydin and Mugla with an investment volume of around $1 billion.
The country will also offer, for the first time, a 1,200 MW capacity offshore YEKA tender. The plants will be located in the provinces of Kirklareli, Tekirdag, and Edirne in the Thrace region of Turkey. The total investment volume is expected to exceed $3 billion.
Railway project partnership
Erdmann said that Germany commends Turkey’s aim to expand its railway network in the country, which is 2.5 times bigger than Germany.
Recently, German media outlets have claimed that Turkey and Germany are in talks for a €35 billion (approx. $40 billion) railway modernization project led by a Siemens consortium.
“This step is pleasing both in terms of freight shipment and passenger transportation. In fact, Turkey and Germany’s partnership in this sector dates back 100 years. Currently, I can say that Turkey and Germany are in talks about expanding these lines but I cannot provide any more details on that,” he said.
Turkey has undertaken many railway projects over recent years to upgrade and extend its railway network.
It has carried out a series of high-speed railway projects, starting with the opening of the Ankara-Eskisehir line in 2009. In 2011, over 200 kilometers in length of the Ankara-Konya line was put into service, followed by the Eskisehir-Istanbul line in 2014.
The country is still working on the Ankara-Izmir high-speed railway line with a length of 625 km as well as the 400-km longagencyra-Sivas line.
In April, Turkish State Railways (TCDD) signed a €340 million ($420 million) agreement for ten Velaro high-speed trains with Siemens. The Turkish Velaro fleet will expand to 17 trains with this new contract.