In August 2016, Turkey joined the rest of the G20 countries and met the concept of sovereign wealth funds when it passed a law establishing the Turkey Wealth Fund Management Joint Stock Corporation (the "Corporation") and mandating the establishment of the Turkish Sovereign Wealth Fund (the "Fund"). The Fund now owns key Turkish public assets and the Corporation will manage those assets and use them to grow and stabilize the Turkish economy. It may also use those assets as collateral to secure funding for Turkey's major infrastructure projects.
Law no. 6741 (the "Law") sets forth the purpose and targets of the Turkish sovereign wealth fund (the "Fund"). The Fund was created to help grow the Turkish economy and to address some of its structural problems.
The government has set the initial target for the asset size of the Fund at USD 200 billion amounting to approximately 28% of Turkey's 2015 GDP, according to World Bank data.
The Law establishing the Corporation sets forth ambitious targets for the work of the Fund, including:
- Contributing to the growth rate by 1.5% annually over the next ten years;
- Providing financing for strategic mega-projects such as the third Istanbul international airport and nuclear power plants;
- Accelerating the growth and deepening of the capital markets;
- Popularizing the use of sukuk and other Islamic finance instruments;
- Encouraging local companies involved in strategic technology-based sectors such as defence, aviation and software to become global players by supporting them through equity investments and financing on a project basis; and
- Creating additional employment;
- Creating the opportunity for direct investments by the Corporation outside of Turkey in strategic sectors including oil and gas.
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Aslı Gülüm, an associate at Çakmak-Gökçe Avukatlık Bürosu, assisted in the development of this publication.
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