Saudi Arabia to Invest $2 Billion in Turkish Solar Power Plants
Published · 5 min read
Saudi Arabia has agreed to invest around $2 billion to build solar power plants in Turkey, marking the first phase of a major renewable energy partnership between the two countries.
The deal was signed on February 3, 2026, during Turkish President Recep Tayyip Erdoğan’s visit to Riyadh. It represents one of the largest foreign investments in Turkey’s renewable energy sector and signals deepening economic ties between the regional powers.
Two Solar Plants to Power 2 Million Homes
Under the agreement, Saudi utility giant ACWA Power will construct two solar facilities with a combined capacity of 2,000 megawatts in the central provinces of Sivas and Karaman.
Turkish Energy Minister Alparslan Bayraktar and Saudi Energy Minister Prince Abdulaziz bin Salman Al Saud signed the intergovernmental framework. The locations were chosen for their high solar exposure and importance to Turkey’s electricity grid.
Turkey will purchase the electricity for 25 years at record-low prices of €1.995 per kilowatt-hour for the Karaman plant and €2.3415 for the Sivas facility. These rates are significantly lower than previous renewable projects in the country.
Once operational, the plants will generate enough clean energy to supply approximately 2.1 million households. Construction is scheduled to begin in 2027, with the first phase targeted for completion by the end of that year.
Broader Partnership Includes Wind and Storage
The $2 billion investment is only the beginning. The full agreement calls for 5,000 megawatts of renewable capacity across two phases.
A second phase will add 3,000 megawatts combining solar and wind power projects, with completion expected between 2028 and 2029. Both countries are also discussing energy storage systems and floating solar projects to expand the partnership.
Turkey needs to add roughly 8,000 to 9,000 megawatts of renewable capacity annually to meet its goal of 120,000 megawatts in solar and wind power by 2035. The Saudi deal will help close that gap.
Strategic Win for Both Nations
For Turkey, which relies heavily on energy imports, the project reduces dependence on foreign fossil fuels while advancing clean energy targets. At the end of 2025, renewables accounted for 62.3% of Turkey’s total installed electricity capacity.
Treasury and Finance Minister Mehmet Şimşek called the investment “one of the most important examples of direct foreign investment in our energy sector.” He said it will “accelerate the green transition, enhance energy security and structurally reduce reliance on energy imports.”
The minister noted that foreign direct investment reached $12.4 billion in the first 11 months of 2025, up 28% from the previous year.
For Saudi Arabia, the deal aligns with its Vision 2030 strategy to transform the economy beyond oil. The Kingdom aims to generate 50% of its electricity from renewables by 2030 and has set a target to build a $25 billion annual green energy export industry.
Saudi Arabia has developed a renewable energy investment pipeline exceeding $32 billion for projects between 2025 and 2030.
Half of Equipment to Come from Turkish Firms
A key feature of the agreement is Turkey’s push for domestic manufacturing. Bayraktar stated the project aims for 50% localization, meaning half of the equipment and services will be sourced from Turkish companies.
The commitment is designed to boost Turkey’s solar manufacturing industry and create economic opportunities. Bayraktar confirmed the investments “will be financed entirely through external financing” with credit provided by international financial institutions, ensuring no direct burden on Turkey’s public finances.
Grid Upgrades and Regional Energy Integration
Turkey is using $748 million in World Bank financing to strengthen its electricity transmission network, a critical step to handle the intermittent nature of solar and wind power.
Beyond the immediate solar projects, both countries discussed longer-term cooperation. Bayraktar mentioned “the electricity transmission line from Saudi Arabia to Türkiye, and the interconnection,” though technical and political challenges remain.
Such a transmission line could transform regional energy dynamics. The recently signed Pan Arab Electricity Market initiative could create a regional market among League of Arab States members, opening new opportunities for energy trade.
Turkey Accelerates Renewable Push
The Saudi investment strengthens Turkey’s position in Europe’s renewable energy landscape. Turkey generated 42% of its electricity from clean sources in 2023, above the global average of 39%.
However, only 16% came from wind and solar that year, lagging behind countries like Greece at 19%. Turkey added 4.5 gigawatts of solar capacity in 2025 alone, showing rapid progress.
The country aims for 47% renewable electricity by 2030. Wind and solar power have already lowered Turkey’s import bills by preventing $7 billion in fossil fuel imports over a 12-month period, according to analysis by Ember.
Coal still accounted for over a third of electricity generation in 2024, presenting an ongoing challenge for the country’s energy transition.
What Comes Next
Construction of the first two solar plants will begin in 2027, with completion targeted by the end of that year. The full 5-gigawatt project should be finished between 2028 and 2029.
Bayraktar noted that through intergovernmental agreements, Turkey can “bring large-scale projects to our country at much cheaper prices over a long period.” This approach offers an alternative to traditional competitive tenders.
The agreement serves as a model for renewable energy cooperation that could encourage similar partnerships across the Middle East. As countries seek to meet climate commitments while enhancing energy security, such deals are becoming more attractive.
According to the International Renewable Energy Agency, 91% of new renewable projects are now cheaper than the lowest-cost fossil fuel alternatives. This economic reality is driving the global energy transition forward.
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