Their predicament highlights the far-reaching impact of the lira’s 69 percent slump against the dollar since the beginning of 2010 as President Recep Tayyip Erdogan moves his country toward authoritarianism. His grip on the country culminated this week with his swearing in for a five-year term as president with enhanced powers and the appointment of his son-in-law to oversee economic policy.

“The lira’s depreciation in recent years was unexpected but that is not the only factor,” said Zumrut Imamoglu, the chief economist of Turkish industry and business association Tusiad. “While costs are increasing because of the currency shock, companies can’t adjust their prices accordingly due to state regulation and price ceilings, which in turn, causes financial problems.”

Cash Injections

Of the $95 billion invested into the sector since 2003, about $51 billion is debt that still needs to be paid, according to the association’s data. That’s 15 percent of the $340 billion the nation’s central bank’s data shows that non-financial companies owe in foreign liabilities.

The currency’s decline has caused a mismatch between income and rising borrowing costs. The dollar value of average electricity prices on the government-brokered power market fell to $45 per megawatt-hour at the end of May from $81 in 2010, causing some power producers to renegotiate their borrowings with lenders.

“Power plants without any power purchase agreements have a total liability of paying back nearly $3 billion to banks every year for their loans, which is almost $2.5 billion more than the cash they can generate,” said Cem Asik, chairman of the electricity producers’ association. “Investors need to inject cash to cover the difference or refinance.”