Statkraft is offering for sale its partly built Cetin hydropower plant in Turkey, the Norwegian state-owned company said on June 13.

The divestment would see another European company selling assets in Turkey after last week UK’s biggest retailer Tesco agreed to sell its Turkish unit Kipa for £30m. Turkish media reports also suggest Russia’s Sberbank mulls selling its local unit Denizbank amid rising tension between Ankara and Moscow.

Statkraft announced in February it decided to suspend the construction of the 517MW hydropower plant in sourtheast Turkey over security reasons. “The security situation in South-East Turkey has resulted in increased risk related to the Cetin project, and there have been major challenges related to project execution”, the company said back in February.

Now the Norwegian company is looking to sell the plant, which is about one-third complete and represents Statkraft's biggest hydropower project outside Norway. Statkraft has chosen brokerage Garanti Securities, a subsidiary of Turkey's Garanti Bank, as financial advisor for the sale and had set an August 1 deadline for submitting indicative bids, Anadolu Agency reports. The deal is expected to be completed by the end of this year. 

The exit of European companies comes at a time when a number of factors are poisoning the business climate in Turkey and weighing on foreign investor confidence: political uncertainties, the violence that has engulfed the Kurdish provinces ans is now showing signs of spreading to the country’s metropolitans, and wider geopolitical risks in the region. According to the World Bank’s latest Doing Business 2016 ranking, business climate in Turkey deteriorated with the country dropping to the 55th place out of 189 economies from the 51st place in the previous year.

Net foreign direct investment inflows into Turkey declined by 54% y/y to $1.7bn in the first four months of the year, financing only 16% of the country’s $10.8bn current account deficit in the period, the latest GDP data show.

Despite rising risks, however, Turkey's market continues to be attractive for some investors. Abraaj Group last week agreed to buy a minority stake in the Turkish lender Fibabanka.