Türkiye and Saudi Arabia sign $2 billion solar investment agreement

Turkish Minister of Energy and Natural Resources Alp Arslan Bayraktar announced on Tuesday the signing of a $2 billion investment agreement in the field of solar energy with Saudi Arabia.

The agreement was signed by Bayraktar and his Saudi counterpart, Abdulaziz bin Salman bin Abdulaziz, at the headquarters of the Saudi Ministry of Energy, under the title “Government Agreement on Renewable Energy Plant Projects”.

Bayraktar said in press statements after the signing that they held talks between the delegations of the two countries as part of President Recep Tayyip Erdogan’s official visit to Saudi Arabia.

He explained that today they have achieved the goal of enhancing the volume of trade exchange and investments between the two countries thanks to the vision put forward by President Erdogan and Saudi Crown Prince Mohammed bin Salman.

Bayraktar pointed out that Türkiye has big goals in the field of renewable energy.

He continued: “The President of the Republic (Erdogan) announced this to the world at the COP29 conference in Baku, where he said that by 2035, Türkiye will reach an installed capacity of 120,000 megawatts in solar and wind energy, and to achieve this goal, we need to add between 8,000,000 and even 10,000 megawatts of new capacity annually to our system”.

Regarding the renewable energy plant projects agreement signed with Saudi Arabia to establish plants in Türkiye, Bayraktar said: “The project has a capacity of about 5,000 megawatts. The first phase of our project includes 2,000 MW solar power projects, including 1,000 MW in Sivas, and another 1,000 MW in Karaman Province, and we will buy the electricity produced, especially from the project, for nearly 25 years”.

Bayraktar pointed out that they have implemented large-scale projects through intergovernmental agreements that will provide Türkiye with cheaper electricity in the long term.

He continued, “We’ll get electricity at the lowest price Türkiye has witnessed so far, and God willing, we will provide it to our citizens”.

Bayraktar confirmed that Türkiye has requested a 50% localization rate within the framework of the project, saying, “We aim to implement a project capable of meeting the electricity needs of about 2.1 million homes, and we plan to lay the foundation stone in 2027, with the first phase to be completed by the end of the same year, and the project to be fully completed in 2028 and 2029”.

He also noted that other projects that will make cooperation between the two countries in the field of electricity more sustainable will be discussed.

In response to a question about whether similar agreements will be signed during Wednesday’s visit to Egypt, Bayraktar explained that they will discuss various projects there, pointing to the importance of cooperation in the field of natural gas in particular.

He added that they held talks with Egypt on oil and gas exploration and resource trading, and also discussed projects to take advantage of unused gasification vessels during the summer in Egypt.

For its part, the official Saudi Press Agency (SPA) reported that the agreement comes within the framework of strengthening bilateral relations between the two countries and consolidating strategic cooperation between them in the energy sector.

According to the Saudi Press Agency, the agreement aims to enhance cooperation between the two countries in the fields of renewable energy and green technologies, and to support the development and implementation of high-quality projects that contribute to diversifying the energy mix and enhancing its security.

The two sides stressed, according to the agency, that this agreement represents an important step towards strengthening the investment partnership between Saudi Arabia and Türkiye.

On Tuesday afternoon, the Turkish president arrived in the capital Riyadh as part of an official visit, and Erdogan is scheduled to head to Egypt on Wednesday, after completing his visit to the kingdom of Saudi Arabia.