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The Government of the Republic of Türkiye, represented by Minister of Energy and Natural Resources Alparslan Bayraktar, and the Government of the Kingdom of Saudi Arabia, represented by Minister of Energy Prince Abdulaziz bin Salman Al Saud, have signed an intergovernmental agreement to develop renewable power generation projects, including solar and wind energy, with a total capacity of 5,000 MW in Türkiye, with the participation of Saudi companies.
The agreement marks a significant step toward strengthening bilateral cooperation in the energy sector and expanding cross-border investments, at a time when the region is accelerating its transition toward clean energy sources.
As part of the first phase of the agreement, renewable energy projects with a combined capacity of 2,000 MW will be implemented through the construction of two solar power plants, each with a capacity of 1 GW. The projects will be located in the provinces of Karaman and Sivas, according to the Turkish Ministry of Energy.
The investment value of this phase is estimated at approximately USD 2 billion, with the solar power plants expected to supply electricity to around 2.1 million households.
Under the agreement, the Turkish government will purchase electricity generated from the projects for a period of 25 years, at a price of 1.995 euro cents per kilowatt-hour from the Karaman plant and 2.3415 euro cents per kilowatt-hour from the Sivas plant. These prices represent the lowest electricity sales prices recorded among renewable energy projects implemented in Türkiye to date.
The projects also include a 50% local content requirement, supporting the electrical equipment and services sectors, strengthening domestic supply chains, and enhancing national industrial capacity.
In this context, Minister Alparslan Bayraktar emphasized that the agreement represents one of the most significant examples of foreign direct investment in Türkiye’s energy sector, noting that the projects will be fully implemented through external financing, with loans provided by international financial institutions, ensuring long-term financial sustainability.
He also described the agreement with Saudi Arabia as the strongest indicator of confidence in Türkiye’s energy sector and investment environment, stressing that it constitutes a pivotal step in the country’s energy transition and in enhancing its attractiveness to large-scale investments.
The agreement reflects a new model for implementing large-scale energy projects in Türkiye, based on bilateral intergovernmental cooperation rather than traditional mechanisms, and supported by external financing from international financial institutions.
This model stands out as one of the most prominent examples of foreign direct investment in Türkiye’s energy sector and serves as a clear indicator of growing confidence in the investment environment and the country’s ability to attract large-scale energy projects under competitive conditions.
The initiative is expected to enhance the region’s attractiveness to international investors, support energy market stability, and reinforce Türkiye’s role as a regional hub for renewable energy projects and cross-border partnerships.
Key features of the renewable energy projects include:
These projects represent a major milestone in Türkiye’s strategy to increase its installed solar and wind capacity to 120,000 MW by 2035, contributing to energy security, economic development, and accelerating the transition toward clean energy sources.
*Photo: Alparslan Bayraktar / X
