New Framework and Application Criteria for Project‑Based State Aid

Project‑based state subsidies are reshaping the investment landscape with new scope and application criteria.

Strategic Framework: Expansion of Aid Scope

■Scope now extends from large‑scale infrastructure to SME‑focused innovation projects, covering 45% of eligible activities.

■As of 2024, the total allocated budget is set at $12.5 billion TL.

■New criteria prioritize green and digital transformation initiatives.

Striking Changes to Application Requirements

■Application process will be completed in a single step via a digital platform.

■Collateral ratio reduced from 10% to 5%, easing liquidity pressure for entrepreneurs.

■Project duration capped at 24 months, with a possible 6‑month extension.

Risk‑Reward Landscape for Market Participants

■Financing cost reduction could compress credit spreads by 10 basis points.

■Foreign investors view the new aid package as a catalyst for Turkey’s innovation ecosystem.

■Sectoral allocation: Energy (30%), Technology (25%), Manufacturing (20%), Agriculture (15%), Other (10%).

Markets interpret this reform as a clear signal of the government’s growth‑oriented agenda. The easing of credit terms for the SME segment should alleviate short‑term liquidity strains while accelerating long‑term capital market integration. Technical analysis using Fibonacci retracements and Ichimoku clouds suggests a bullish channel for the BIST 100, potentially moving from 4,500 to 4,750. However, the increased flexibility in application criteria may heighten short‑term volatility; thus, employing stop‑loss strategies based on moving averages is advisable.

■Caner Yılmaz