Saudi Arabia and Türkiye Ink Major Renewable Energy Deal Valued at $2 Billion

Historic Agreement Signed in Riyadh

In a move to bolster strategic cooperation in the energy sector, Saudi Arabia and Türkiye officially signed an agreement on renewable energy power plant projects on February 3, 2026, during an official visit by Turkish President Recep Tayyip Erdoğan to Riyadh. The 'Intergovernmental Agreement on Renewable Energy Power Plant Projects' was signed by Saudi Minister of Energy Prince Abdulaziz bin Salman Al Saud and Turkish Minister of Energy and Natural Resources Alparslan Bayraktar.

Phased Development of 5,000 MW Capacity

The comprehensive agreement outlines the development of large-scale renewable energy power plant projects in Türkiye, targeting a total installed capacity of up to 5,000 megawatts (MW) of solar and wind facilities. This ambitious plan will be implemented in two distinct phases:

• Phase One: This initial stage involves an investment of approximately $2 billion for the development of 2,000 MW of solar capacity. Two solar power plants are planned, each with a capacity of 1,000 MW, to be located in the eastern province of Sivas and the central Turkish region of Karaman (specifically the Tasli area). Construction for this phase is slated to commence in 2027, with full operational status anticipated by 2029. The electricity generated will be purchased by a Turkish state-owned company under long-term agreements, extending up to 25 to 30 years. Officials have highlighted that these projects are expected to deliver record-low electricity prices, with the Karaman project, for instance, securing a rate of 1.995 euro cents per kilowatt-hour. These plants are projected to supply clean electricity to over 2 million households. Financing for these projects will be entirely sourced through external funding, including loans from international financial institutions. A 50% local content rate will be prioritized, maximizing the utilization of local equipment and service providers.
• Phase Two: This subsequent phase will add an additional 3,000 MW of capacity, with specific projects to be executed under frameworks mutually agreed upon by both governments. Completion for this phase is expected in 2028 or 2029.

Strengthening Bilateral Ties and Energy Transition

This agreement signifies a major advancement in the economic and strategic partnership between Saudi Arabia and Türkiye. It aims to enhance collaboration in renewable energy and green technologies, supporting Türkiye's goals for energy diversification, energy security, and its transition to a low-carbon economy. The deal is also a crucial step towards Türkiye's ambitious target of reaching 120,000 MW of installed solar and wind capacity by 2035. For Saudi Arabia, the investment aligns with its broader strategy of expanding renewable energy portfolios internationally and deploying capital through state-backed entities. Both nations view this as a reflection of mutual trust and a shared commitment to strategic projects with sustainable economic and developmental impacts.