Saudi Arabia, Turkey seal major solar investment agreement

RIYADH – Saudi Arabia and Turkey have signed a $2 billion investment agreement to develop large-scale solar power projects in Turkey, marking a significant step in deepening economic and strategic cooperation between the two regional powers amid mounting geopolitical and energy challenges.

The agreement was signed on Tuesday at the Saudi Ministry of Energy by Turkish Minister of Energy and Natural Resources Alparslan Bayraktar and his Saudi counterpart Prince Abdulaziz bin Salman, during an official visit by Turkish President Recep Tayyip Erdogan to Riyadh.

The deal, formally titled the Intergovernmental Agreement on Renewable Energy Power Plant Projects, provides for the construction of solar and wind facilities with a total planned capacity of 5,000 megawatts, beginning with a 2,000-megawatt solar phase valued at $2 billion.

Speaking after the signing, Bayraktar said the agreement reflected Ankara’s determination to expand trade and investment with Saudi Arabia in line with the strategic vision of President Erdogan and Saudi Crown Prince Mohammed bin Salman.

“These investments represent one of the most important examples of direct foreign investment in Turkey’s energy sector,” Bayraktar said, noting that the projects will be financed entirely through external funding, including loans from international financial institutions.

Solar farms across central and eastern Turkey

Under the first phase of the agreement, Saudi companies will construct two solar power plants, one with a capacity of 1,000 MW in the eastern province of Sivas, and another 1,000 MW facility in the Tasli area of Karaman, in central Turkey. Electricity generated from the projects, particularly the Karaman plant, will be purchased by Turkey under long-term agreements of up to 25 years.

Bayraktar said the projects would deliver the lowest electricity prices Turkey has achieved to date, adding that the savings would ultimately benefit consumers.

“We will provide electricity at unprecedented low costs, and God willing, we will pass this on to our citizens,” he said.

The minister confirmed that the agreement includes a 50 percent localisation requirement, designed to boost Turkey’s domestic electrical equipment and services sectors. Once operational, the projects are expected to supply electricity to around 2.1 million households.

Construction is planned to begin in 2027, with the first phase scheduled for completion by the end of that year. Full completion of the broader renewable programme is expected in 2028 and 2029.

Renewable ambitions and regional outreach

The deal aligns with Turkey’s long-term renewable energy strategy, which Bayraktar said was reaffirmed by President Erdogan at the COP29 climate summit in Baku, where Turkey pledged to reach a combined 120,000 MW of installed solar and wind capacity by 2035. Achieving that target will require adding between 8,000 and 10,000 MW annually, he said.

Bayraktar added that discussions with Saudi officials also covered additional electricity cooperation projects aimed at making bilateral energy ties more sustainable over the long term.

Saudi state news agency SPA said the agreement was signed within the framework of strengthening bilateral relations and enhancing strategic cooperation in the energy sector. It said the projects would support energy diversification, improve energy security and advance collaboration on renewable and green technologies.

Both sides described the agreement as a key milestone in expanding Saudi-Turkish investment partnerships.