The 5 Billion Lira Threshold: The Era of Mega Projects in State Aid

The Ministry of Industry and Technology has taken a strategic step in the investment climate, introducing a new regulation that limits the scope of state aid exclusively to "mega-scale" projects, radically restructuring the incentive mechanism with a focus on resource efficiency.

Raising the Investment Threshold to 5 Billion Lira

With this change, the entry door to the state-supported incentive system opens only to strategic investments above a certain size, aiming to channel resources into high-value-added areas. The new criteria set within the scope of the decree are as follows:

■A minimum fixed investment amount of 5 billion lira has been introduced, excluding small-scale investments from the scope.

■Only projects with a "completely new investment" nature, established from scratch, will be eligible for support.

■This regulation focuses on the establishment of massive facilities that will trigger sectoral transformation, rather than capacity increases in existing ones.

Flexibility in Corporate Structure and Investor Subsidiaries

The new regulation provides legal flexibility that reduces bureaucratic hurdles in contracting processes, allowing companies to take a more active role in their financial engineering. Key innovations in the contracting process include:

■Investors or their subsidiaries, where investors own all shares, can sign contracts directly.

■This will provide operational ease in project-based financing for holding structures, allowing the use of project finance models without directly burdening the parent company's balance sheet.

Despite the contraction in commercial loans, such incentive steps restructure the banking sector's loan portfolio. This high threshold of 5 billion lira may increase risk concentration in managing large-scale corporate credit demands for banks; however, these state-backed incentives are key to breathing life into commercial credit growth in an environment where macroprudential measures are tightening. The sector should read this move not as an escape from SME loans, but as a transformation focused on strategic growth.