smart cities

Data-Based Infrastructure for Smart Cities

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Data-Based Infrastructure for Smart Cities

Country
Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Infrastructure
Sub Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Utilities
Indicative Return
Describes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
10% - 15% (in IRR)
Investment Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Medium Term (5–10 years)
Market Size
Describes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
There are 2 million smart water meters and 10 million smart electricity meters in Turkey. (6)
Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.
> USD 10 million
Direct Impact
Describes the primary SDG(s) the IOA addresses.
Industry, Innovation and Infrastructure (SDG 9) Sustainable Cities and Communities (SDG 11) Responsible Consumption and Production (SDG 12)
Indirect Impact
Describes the secondary SDG(s) the IOA addresses.
Climate Action (SDG 13)

Business Model Description

Investments in Connectivity Technology for Smart Cities: A data-based city infrastructure to use smart performance meters for resource efficiency

Expected Impact

This IOA will utilize IoT technology and smart meters to enable the real-time monitoring of energy consumption to improve energy and resource efficiency levels.

How is this information gathered?

Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.

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Country & Regions

Explore the country and target locations of the investment opportunity.
Country
Region
  • Turkey: Central Anatolia Region
  • Turkey: Eastern Anatolia Region
  • Turkey: Marmara Region
  • Turkey: Mediterranean Region
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Sector Classification

Situate the investment opportunity within sustainability focused sector, subsector and industry classifications.
Sector

Infrastructure

Development need
Turkey's performance on SDG 9 (Industry, Innovation and Infrastructure) exhibits major challenges, and significant challenges still remain for SDG 12 (Responsible Consumption and Production) according to the Sustainable Development Report 2020. (1)

Policy priority
The government has planned the following public investment amounts for urban infrastructure areas for 2020: 198 million TRY (29 million USD) for urbanization, 152 million TRY (22 million USD) for communication infrastructure, 71 million TRY (10 million USD) for environment and 67 million TRY (10 million USD) for municipal services. (2)

Gender inequalities and marginalization issues
Within the infrastructure sector, there is a high rate of informality among solid waste collectors. Workers in this area suffer from poor working conditions and a lack of social security. In terms of the provision of utilities, households with lower income levels face the risk of energy poverty. Fair employment practices and pricing mechanisms need to be implemented to address the issues of marginality within this sector. Investments in this area need to generate job opportunities within the green economy and promote energy-efficiency measures to decrease the household consumption costs.

Investment opportunities
Turkey's Private Participation in Infrastructure (PPI) figures show that infrastructure in ICT, integrated MSW (municipal solid waste) and treatment and disposal still needs a higher private sector engagement. (3)

Key bottlenecks
Given high investment and operations costs, human capital and technology resources and governance needs, some urban infrastructure services such as wastewater treatment facilities cannot reach the desired efficiency levels. New models are needed to improve efficiency in urban infrastructure

Sub Sector

Utilities

Development need
The COVID-19 era showcased the need for remote monitoring for utilities, as countries struggled to monitor energy expenditures in-person.

Policy priority
There is a target to facilitate advanced metering infrastructure that measures energy distributed until 2025 and which includes at least 80% of customers by 2035 as part of Turkey's Smart Grid roadmap. (4)

Gender inequalities and marginalization issues
According to academic reseach in this area, approximately a quarter of the households in Turkey are energy poor. Half of the households with the lowest income levels carry the risk of facing energy poverty. (18)

Investment opportunities
Turkey's Private Participation in Infrastructure (PPI) figures show that infrastucture in ICT, integrated MSW (municipal solid waste) and treatment and disposal still needs a higher private sector engagement. (3)

Key bottlenecks
While investing in digital infrastructure initiatives such as smart cities, it is imperative to not only invest in digital literacy, but also digital security to minimize risks

Pipeline Opportunity

Discover the investment opportunity and its corresponding business model.
Investment Opportunity Area

Data-Based Infrastructure for Smart Cities

Business Model

Investments in Connectivity Technology for Smart Cities: A data-based city infrastructure to use smart performance meters for resource efficiency

Business Case

Learn about the investment opportunity’s business metrics and market risks.

Market Size and Environment

Critical IOA Unit
Describes a complementary market sizing measure exemplifying the opportunities with the IOA.

There are 2 million smart water meters and 10 million smart electricity meters in Turkey. (6)

A market sizing value for smart meters does not currently exist for Turkey, but a sectoral report is used to retrieve the current number of smart meters in use.

The household number is retrieved from the database of Turkish Statistical Insititute.

Indicative Return

IRR
Describes an expected annual rate of growth of the IOA investment.

10% - 15%

Research by European Commission in similar contexts shows that smart metering investments generate between 11.7-17% IRR. (8)(9)

Investment Timeframe

Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.

Medium Term (5–10 years)

In order to advance 5G network and infrastructure, installation of 5G stations are expected to be finalized by 2023. (10) Large scale installations take between 5 to 6 years. (11)

Türk Telekom already piloted a project with BUSKİ and Baylan Water Meters to install smart water meters to remotely monitor water consumption.

Ticket Size

Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.

> USD 10 million

Market Risks & Scale Obstacles

Capital - CapEx Intensive

High capital costs might provide an obstacle for medium-sized enterprises to adopt 5G projects. Reliance on existing underlying broadband infrastructure, which if not properly maintained could cause essential technology and service to fail

Market - Highly Regulated

IoT technologies are newly emerging and require high municipal engagement

Potential concerns on data privacy

Impact Case

Read about impact metrics and social and environmental risks of the investment opportunity.

Sustainable Development Need

The COVID-19 era showcased the need for remote monitoring for utilities, as countries struggled to monitor energy expenditures in-person.

Smart metering helps optimize energy use, reducing energy waste and increasing disposable income for households.

Gender & Marginalisation

According to academic reseach in this area, approximately a quarter of the households in Turkey are energy poor. Half of the households with the lowest income levels carry the risk of facing energy poverty. (18)

Expected Development Outcome

This IOA can enable real-time monitoring of energy consumption to improve energy and resource efficiency through smart meters using IoT technology.

This IOA can increase resource utilization by installing smarter energy management infrastructure.

This IOA can lower energy use by enabling customers to make informed decisions through data collection.

Gender & Marginalisation

Investments in this IOA will particularly help households with limited purchasing power to optimize on their energy use.

Primary SDGs addressed

Industry, Innovation and Infrastructure (SDG 9)
9 - Industry, Innovation and Infrastructure

9.5.1 Research and development expenditure as a proportion of GDP

Current Value

0.96% (12)

Target Value

The long-term objective for this indicator is a value of 3.7. (12)

Sustainable Cities and Communities (SDG 11)
11 - Sustainable Cities and Communities

11.a.1 Number of countries that have national urban policies or regional development plans that (a) respond to population dynamics; (b) ensure balanced territorial development; and (c) increase local fiscal space

Current Value

1 (13)

Target Value

1 (13)

Responsible Consumption and Production (SDG 12)
12 - Responsible Consumption and Production

12.1.1 Number of countries developing, adopting or implementing policy instruments aimed at supporting the shift to sustainable consumption and production

Current Value

1 (13)

Target Value

1 (13)

Secondary SDGs addressed

13 - Climate Action

Directly impacted stakeholders

People

Electricity and water consumers/households

Gender inequality and/or marginalization

Communities with limited access to utilities due to poor infrastructure

Indirectly impacted stakeholders

People

Urban population

Planet

Reduced GHG emissions through reduced energy consumption

Outcome Risks

Reduced GHG emissions through reduced energy consumption

Impact Risks

External risk given that the 5G and communications infrastructure sector is heavily affected by multiple factors.

External risk given that the 5G and communications infrastructure sector is heavily affected by multiple factors.

Execution risk given a transition to smart infrastructure might disrupt current services.

Impact Classification

B—Benefit Stakeholders

What

Increased resource efficiency and energy savings.

Risk

Disruptions in the new 5G infrastructure might create prolems in service delivery for energy and water consumption.

Impact Thesis

This IOA will utilize IoT technology and smart meters to enable the real-time monitoring of energy consumption to improve energy and resource efficiency levels.

Enabling Environment

Explore policy, regulatory and financial factors relevant for the investment opportunity.

Policy Environment

Turkey's plans to build local 5G capacity can facilitate the spread of smart meter infrastructure through enhanced machine-to-machine communication technology.

Information Technologies and Communications Authority (BTK) will carry out the necessary studies for the use of new generation domestic and national 5G and beyond communication technologies in the country.

(11th Development Plan): The 11th Development Plan states that “R&D and production activities of domestic electronic communication network and infrastructure components including 5G and higher technologies will be encouraged”.

Financial Environment

Other incentives: Small and Medium Industry Development Organization (KOSGEB) also support smart digital technologies with up to 300 thousand TRY in grants and 350 thousand TRY in concessional loans. (16)

Financial incentives: Communications Technology Cluster (HTK) and TÜBİTAK jointly run and support the “Uçtan Uça Yerli” and National 5G Communication Network Projects so as to develop the necessary network infrastructure and design for 5G.

Fiscal incentives: The Ministry of Industry and Technology declared it would institute necessary support mechanisms to expand the 5G infrastructure in Turkey.

Regulatory Environment

(Regulation): For smart meters, Turkey's Energy Market Regulatory Authority is the regulatory body for energy in Turkey (including smart electricity meters).

(Regulation): The main piece of legislation that regulates this area is the Energy Markets Law. Since 2013, this law has been amended to give the ownership of electricity metering systems to electricity distribution companies. (15)

(Regulation): The Regulation on Stabilizing and Mediating Electricity Markets published on 14.04.2009 by the Official Gazette #27200 further defines the legal metering methodology, which should be hourly and defines other methods for circumstances where hourly metering is not possible. (15)

Another law that directly governs this area is the Regulation on the Appropriate Methods and Principles for Determining the Measures of Smart and Automatic Meter Reading Systems published on 10/04/2011 in the Official Gazette #27901 and amended on 1/12/2012 through the Offical Gazette #28484. (15)

(Regulation): Municipalities are heavily involved as partners in the smart-metering area. Information Technologies and Communications Institute regulates 5G infrastructure.

Marketplace Participants

Discover examples of public and private stakeholders active in this investment opportunity that were identified through secondary research and consultations.

Private Sector

Firms like Baylan Water Meters, Luna Smart Meters, Manas and national telecom companies like Türk Telekom, Turkcell and Vodafone.

Government

Ministry of Industry and Technology, Ministry of Transport and Infrastructure, Municipalities, Water and Sewage Treatment Organizations such as Bursa Directorate of Water and Sewage.

Multilaterals

World Bank, EBRD, EU through IPA funding.

Target Locations

See what country regions are most suitable for the investment opportunity. All references to Kosovo shall be understood to be in the context of the Security Council Resolution 1244 (1999)
country static map
urban

Turkey: Central Anatolia Region

The municipalities of Istanbul, Ankara, Karaman, Antalya, Kars and Bursa have projects to pilot smart meters. Some cities are retrieved from Türk Telekom's pilot cities for smart meter installation (19).
urban

Turkey: Eastern Anatolia Region

The municipalities of Istanbul, Ankara, Karaman, Antalya, Kars and Bursa have projects to pilot smart meters. Some cities are retrieved from Türk Telekom's pilot cities for smart meter installation (19).
urban

Turkey: Marmara Region

The municipalities of Istanbul, Ankara, Karaman, Antalya, Kars and Bursa have projects to pilot smart meters. Some cities are retrieved from Türk Telekom's pilot cities for smart meter installation (19).
urban

Turkey: Mediterranean Region

The municipalities of Istanbul, Ankara, Karaman, Antalya, Kars and Bursa have projects to pilot smart meters. Some cities are retrieved from Türk Telekom's pilot cities for smart meter installation (19).

References

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