Turkey secures $2bn Saudi solar investment at record‑low power prices

Turkey and Saudi Arabia have signed a solar power plant investment deal that Ankara says will deliver the cheapest electricity Turkey has ever secured, as the two regional powers deepened economic ties during President Recep Tayyip Erdogan's visit to Riyadh on Tuesday.

Turkish Energy Minister Alparslan Bayraktar and his Saudi counterpart Prince Abdulaziz bin Salman Al Saud signed the deal on the sidelines of the visit, committing Saudi investment to construct 2,000 megawatts of solar power capacity across two sites in the Turkish provinces of Sivas and Karaman, which are both in the Anatolia region.

The deal is the first phase of a broader 5,000-megawatt project and carries an estimated price tag of approximately $2bn in foreign direct investment, Turkish officials said.

Part of the investment will be sourced from Saudi Arabia, and part will be secured from international financial institutions, the officials said.

"We will purchase electricity at 1.995 euro cents per kilowatt-hour for the Taseli project in Karaman. Turkey will buy electricity at this price for approximately 25 years," Bayraktar told reporters. "This is the lowest price we have ever seen in Turkey, and we will pass this on to our consumers and citizens."

Turkish officials add that the first phase of the project will generate enough electricity to meet the needs of 2.1 million households. 

Bayraktar said the government would also look to attract investment in renewable energy through intergovernmental agreements, in addition to competitive tenders.

"We can bring large-scale projects to our country at much cheaper prices over a long period," he added.

A senior Turkish official told Middle East Eye that as part of the second phase of the deal, there might be an opportunity to invest in energy storage and floating solar projects, as Turkey has a broad access to large seas.

Turkey has set an ambitious target of reaching 120,000 megawatts of installed solar and wind capacity by 2035, requiring annual additions of 8,000 to 9,000 megawatts to the national grid, Bayraktar said. 

The construction for the first phase is scheduled to begin in 2027, and to be completed by the end of the year. The second phase of the remaining 5,000-megawatt project is expected to be completed in 2028 or 2029.

The entire 2,000-megawatt first phase should be fully operational by 2029, Bayraktar said.