A 2 billion deal dollars for Saudi investments in the development of solar energy in Turkey were signed by the two countries, as part of the official visit on Tuesday of Turkish President Tayyip Erdogan and his contacts with the crown prince, Prince Mohammed bin Salman.
The investment concerns the construction of large solar power plants in Turkey, with the initial phase of the project providing for an installed capacity of 2,000 MW (megawatts), with the prospect of expansion to 5,000 MW. The first phase of the construction of the photovoltaic park is estimated to cover the energy needs of about two million citizens.
The photovoltaic parks will be built in Sivas province, in the east, and Karaman province, in central Turkey.
Statements about the agreement were made to Turkish media by the Minister of Energy and Natural Resources of Turkey, Alparslan Bayraktar, who signed the agreement together with his Saudi counterpart, Abdulaziz bin Salman Al Saud.
According to statements by Alpaslan Bayraktar, the electricity produced from the photovoltaic park in Karaman will be sold (wholesale price) for only 2 cents per kilowatt hour for 25 years. From the photovoltaic park in Sivas, the price will be about 2.4 cents per kilowatt hour for 25 years (s.f. in Cyprus the weighted price of a kilowatt hour in the competitive electricity market is about 17 cents). As pointed out to the Turkish media, these prices are considered the lowest ever agreed for renewable energy projects in Turkey, making the projects highly competitive compared to previous electricity supply agreements in the country.
Construction is expected to start in 2027, with completion in 2029. Mr. Bayraktar also said that the two projects will be financed entirely from external resources, including loans from international financial institutions and assured that they will not directly burden the public budget.
The energy agreement is part of a broader framework of strategic cooperation between Turkey and Saudi Arabia in areas such as trade, investment, infrastructure, defense and digital technology, in the context of "Vision 2030" and "Century Vision".
The agreement is one of the largest foreign direct investments in the Turkish energy market, especially in the RES sector. Saudi Arabia aims to expand its green energy investments beyond its borders by supporting strategic energy projects with international cooperation.
