Turkey’s Energy and Natural Resources Ministry has signed a comprehensive power purchase agreement with Saudi energy developer ACWA Power to build two large solar power plants in Turkey and advance additional renewable investments, according to statements from Turkish officials.
The agreement was signed in Istanbul on Friday in the presence of Energy and Natural Resources Minister Alparslan Bayraktar and Saudi Energy Minister Prince Abdulaziz bin Salman Al Saud. Turkish officials said the deal builds on an intergovernmental renewable energy framework signed during President Recep Tayyip Erdogan’s Feb. 3 visit to Riyadh, which they said envisages a total of 5,000 megawatts (MW) of solar and wind investments in Turkey.
Under the first phase, two solar power plants will be constructed in the provinces of Sivas and Karaman with a combined installed capacity of 2,000 MW and investments totaling about $2 billion. Bayraktar said the added capacity would help meet the electricity needs of around 2.1 million households.
Bayraktar said the purchase price for electricity generated in Sivas was set at 2.35 euro cents per kilowatt-hour, while electricity from the Karaman project would be bought at a fixed 1.99 euro cents per kilowatt-hour, which he described as the lowest price recorded in Turkey. He said the agreed prices would be valid for 25 years.
Turkish officials said the projects include a minimum 50% local content requirement, with maximum use of domestically sourced equipment and services. Bayraktar added that groundwork is targeted this year, operations are scheduled for 2028, and full production capacity will be reached as soon as possible.
Construction under the first phase is expected to begin in the first or second quarter of 2027, with electricity supply forecast to start by mid-2028, according to details shared alongside the agreement.
In the second phase, Turkey aims to expand cooperation with additional solar and wind investments totaling 3,000 MW, bringing the overall target under the framework to 5,000 MW. ACWA Power is expected to pursue a second-phase agreement before November.
Turkey has sought to attract Gulf investment into its energy sector as it targets raising renewable power generation capacity to 120 gigawatts by 2035. Officials have acknowledged that some earlier efforts were not completed due to disagreements over valuations and pricing. Treasury and Finance Minister Mehmet Simsek described the intergovernmental energy agreement signed in Riyadh as a boost for foreign direct investment inflows, saying the initial $2 billion renewable investment would accelerate the green transition, strengthen energy security, and structurally reduce dependence on energy imports.
ACWA Power, whose largest shareholder is Saudi Arabia’s Public Investment Fund with a 44% stake, already has a presence in Turkey through a gas-fired power plant and has expanded solar investments in several other markets in recent years.
