Unlocking Turkey's Southeast: Investment Opportunities in a Post-PKK Era

The dissolution of the Kurdistan Workers’ Party (PKK) in May 2025 marks a historic turning point for Turkey’s southeastern region, where decades of conflict have stifled economic growth. With armed hostilities ending and political risks abating, the stage is set for a renaissance in sectors like infrastructure, tourism, and energy. Investors who move swiftly to capitalize on this transformation stand to benefit from pent-up demand, geopolitical realignments, and President Recep Tayyip Erdoğan’s aggressive policy agenda. Below, we dissect the opportunities—and risks—in this emerging frontier.

Infrastructure Boom: Rebuilding a War-Torn Region

Southeastern Turkey has long been an economic backwater, with conflict diverting investment to safer regions. Now, with violence receding, infrastructure projects—long delayed—are set to surge. The government’s Vision 2023 plan aims to modernize transportation, energy, and utilities across the region, targeting $30 billion in investments by 2027. Key sectors include:

• Transportation: New highways, railways, and airports will connect cities like Van and Şanlıurfa to Turkey’s core. Companies like Enka İnşaat (ENKA.IS), a leading construction firm, are well-positioned to bid on state contracts.
• Utilities: Aging power grids and water systems will be upgraded. Investors might look to EÜAŞ (EUAS.IS), Turkey’s public energy holding company, which dominates regional projects.

Tourism: Unleashing Cultural and Historical Treasures

Southeastern Turkey is a trove of ancient sites—think the Roman ruins of Zeugma, the medieval city of Hasankeyf, and the UNESCO-listed Diyarbakır Fortress. These attractions were off-limits to tourists during the conflict. With peace comes a golden opportunity to tap into Turkey’s $30 billion tourism industry. Analysts estimate the region could attract 2 million annual visitors by 2030, up from near-zero pre-2025.

Hotels, cultural tours, and adventure travel are ripe for development. The Sakarya Holding (SAKHYT.IS), which operates resorts nationwide, could expand into the region. Meanwhile, smaller firms focused on niche markets—like eco-tourism or heritage preservation—are also poised to thrive.

Energy: A Crossroads for Regional Power Plays

Southeastern Turkey sits at the crossroads of energy-rich regions like Iraq and Syria. Post-PKK, cross-border pipelines and renewable projects—once stalled by violence—are now viable. Turkey’s energy strategy emphasizes reducing reliance on Russian gas and expanding LNG imports.

• Oil and Gas: Companies like Turcas Petrol (TCAR.IS), a leading exploration firm, may explore untapped reserves in the region.
• Renewables: Solar and wind projects could flourish in sun-drenched areas like Harran. The government’s goal of 30% renewable energy by 2030 provides a tailwind.

Geopolitical synergy is another catalyst. Turkey’s improved relations with Syria and Iraq post-PKK dissolution could accelerate projects like the Karkamış Dam or a proposed natural gas pipeline from Iraq’s Kurdistan region.

Risks and Realities

While the outlook is bullish, risks linger. Implementation delays are a perennial concern in Turkey, where bureaucracy often slows projects. Additionally, lingering distrust between Ankara and Kurdish political groups could reignite tensions. Geopolitical risks—such as U.S.-Turkey friction over Kurdish autonomy in Syria—also loom. Investors must remain vigilant to political and economic shifts, including inflation (currently 32%) and currency volatility.

The Bottom Line: Act Now, But Stay Disciplined

The PKK’s dissolution has created a rare convergence of reduced political risk and strategic policy support. For investors, the southeastern region offers a mix of high growth potential and tangible catalysts.

• Immediate Plays: Infrastructure firms with state contracts, tourism operators, and energy companies with cross-border licenses.
• Long-Term Bets: Real estate developers in emerging cities and firms involved in regional trade corridors.

Yet patience is key. Monitor Erdoğan’s policy execution, Kurdish political dynamics, and geopolitical developments. The rewards for those who navigate these risks wisely could be substantial—turning Turkey’s southeast into the next frontier of economic revival.