Türkiye-Saudi Arabia Renewable Energy and Solar Energy Power Purchase Agreement (2026)

Türkiye–Saudi Arabia Renewable Energy and Solar Power Electricity Purchase Agreement, is a comprehensive cooperation signed between the Ministry of Energy and Natural Resources of the Republic of Türkiye and Saudi-based energy company ACWA, covering the construction of solar power plants and long-term electricity procurement. The agreement was implemented during the Signing Ceremony for the Sivas and Taşeli Solar Power Plant Projects held in Istanbul on 20 February 2026.

The agreement includes the construction of two solar power plants with a total capacity of 2,000 megawatts in Türkiye’s Sivas and Karaman Taşeli regions and the implementation of large-scale solar and wind energy projects totaling 5,000 megawatts across Türkiye. In this context, the signing represents the implementation phase of the intergovernmental agreement signed on 3 February 2026 during President Erdoğan’s visit to Riyadh, which foresaw renewable energy investments totaling 5,000 megawatts.

At the ceremony in Istanbul, an investment agreement was signed between the Ministry of Energy and Natural Resources and ACWA, while an electricity purchase agreement was signed between Electricity Generation Inc. (EÜAŞ) and ACWA. It was stated that the plants to be constructed under the agreement will involve a total investment of 2 billion US dollars.

Intergovernmental Agreement Process

The legal framework for renewable energy cooperation between Türkiye and Saudi Arabia was established by the Intergovernmental Agreement on Renewable Energy Plant Projects signed in Riyadh on 3 February 2026. This agreement anticipates the construction of solar and wind power plants with a combined capacity of 5,000 megawatts in Türkiye.

Minister of Energy and Natural Resources Alparslan Bayraktar noted that during President Recep Tayyip Erdoğan’s meetings in Riyadh, an intergovernmental agreement covering a total of 5,000 megawatts of solar and wind investments was signed with Saudi counterpart Abdulaziz bin Salman Al Saud.

The Signing Ceremony for the Sivas and Taşeli Solar Power Plant Projects held in Istanbul on 20 February 2026 marked the implementation phase of the intergovernmental agreement. Under this framework, it was confirmed that Saudi energy company ACWA will initially establish solar power plants in Sivas and Karaman Taşeli.

Thus, the first 2,000 megawatts of the 5,000 megawatt framework outlined in the intergovernmental agreement have been realized through concrete projects.

Signing Process and Parties

At the signing ceremony, two separate agreements were signed under the project framework. In this context, an investment agreement was signed between the Ministry of Energy and Natural Resources and ACWA. The investment agreement was signed by Deputy Minister of Energy and Natural Resources Zafer Demircan and ACWA Deputy Chairman Raad Al-Saady.

Additionally, an electricity purchase agreement was signed between Electricity Generation Inc. (EÜAŞ) and ACWA. The electricity purchase agreement was signed by EÜAŞ General Manager Zafer Benli and ACWA Country General Manager for Türkiye-Azerbaijan Mehmet Selim Güven.

The signing ceremony was also attended by Minister of Energy and Natural Resources Alparslan Bayraktar and ACWA Chairman Mohammed Abunayyan.

Sivas and Karaman Taşeli Solar Power Plant Projects

The first phase implemented under the agreement encompasses the construction of two separate solar power plants in Sivas and Karaman Taşeli. Each plant will have a capacity of 1,000 megawatts, resulting in a total installed capacity of 2,000 megawatts.

The total investment value of the projects is estimated at approximately 2 billion US dollars. Minister Alparslan Bayraktar stated that this investment will be among the largest direct foreign investments in Türkiye’s energy sector.

It was reported that the electricity needs of approximately 2.1 million households will be met by these projects. It was also stated that the new 2,000 megawatt capacity will be integrated into the grid as a renewable energy source.

Electricity purchase prices have been determined separately for each project. An agreement was reached on a price of 2.35 euro cents per kilowatt-hour for electricity produced in Sivas and 1.99 euro cents per kilowatt-hour for electricity produced in Karaman Taşeli. The price determined for Karaman Taşeli was stated to be the lowest electricity purchase price ever recorded in Türkiye.

It was announced that the agreed prices will remain fixed for 25 years. The total procurement period is set at 30 years. A incentive mechanism, similar to those used in YEKA tenders, will be applied during the first five years of construction, with the incentive set at 4.75 euro cents per kilowatt-hour and below the average market price.

It was stated that the foundations of the plants will be laid within 2026, both plants will begin commercial operation in early 2028, and will reach full capacity as soon as possible.

The second phase of the 5,000 megawatt framework plans an additional 3,000 megawatts of solar and wind energy investment. Minister Alparslan Bayraktar stated that the goal is to expand cooperation through additional investments in solar and wind energy in the second phase.

Local Contribution and Localization Target

It was announced that the localization rate for the Sivas and Karaman Taşeli Solar Power Plant projects will be at least 50 percent. Minister Alparslan Bayraktar confirmed that this rate will be applied at both the Sivas and Taşeli plants.

The total investment value of approximately 2 billion US dollars was stated, with the goal that 50 percent of this investment will be carried out in Türkiye. Bayraktar emphasized that the localization target remains firm and that this approach is being maintained throughout the project.

The localization policy was adopted to reduce dependency on imported renewable energy equipment and to mitigate foreign currency outflows. It was noted that international financial institutions have shown interest in the projects. Alparslan Bayraktar pointed to the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) as potential sources of financing for the project.