Saudi Arabia and Turkiye sign intergovernmental 5GW renewable energy deal

Saudi Turkiye Renewable Energy Deal advances with a 2 GW first phase led by ACWA Power, record-low tariffs, targeting 5 GW of solar and wind capacity in Sivas and Karaman by 2028.

Turkiye and Saudi Arabia have signed a renewable energy agreement that launches two utility-scale solar projects totaling 2,000 MW, to be developed by ACWA Power in Sivas and Karaman Ta?eli. Announced at a signing ceremony in Istanbul, the pact is positioned as a landmark step in cross-border clean power development and follows an earlier intergovernmental framework between the two countries. For broader regional context, see saudi clean energy for additional background on investment trends, as this collaboration advances.

The initial build-out includes two 1,000 MW solar plants. According to the agreement, electricity from Sivas will be purchased at 2.35 euro cents per kilowatt-hour, while power from Karaman Ta?eli will be bought at 1.99 euro cents per kilowatt-hour. Officials described these as the lowest prices recorded to date in the country. The rates are set for 25 years within a 30-year total purchase period. During the first five years, a support mechanism similar to YEKA tenders will apply, with incentives at 4.75 euro cents per kilowatt-hour below the average market price.

The projects are valued at approximately $2 billion and are expected to meet the electricity needs of about 2.1 million households. Local content requirements are set at a minimum of 50 percent for both plants. Construction is scheduled to begin in 2026, with commercial operations targeted for early 2028. Readers following power demand and market adjustments can revisit related reporting in turkey electricity covid for historical perspective, even as this agreement establishes a new pricing benchmark.

The accord also outlines a second phase that would add a further 3,000 MW, combining solar and wind resources to bring the program to 5,000 MW overall. As the partnership expands to include wind capacity, our coverage of saudi wind power provides complementary insights on technology and procurement themes relevant to the broader build-out envisioned under this agreement.

Beyond headline capacity, the long-duration power purchase structure is central to the deal. Locking in tariffs at 2.35 and 1.99 euro cents per kilowatt-hour for 25 years offers price visibility for system planners and investors, while the YEKA-like support in the early period can smooth integration risks as local content targets are met. With ACWA Power as developer and the projects sited in Sivas and Karaman Ta?eli, the initiative is designed to anchor scale, cost discipline, and domestic supply-chain participation.

The regional significance is clear. Utility-scale solar programs continue to accelerate across nearby markets, reflecting similar aims to combine capacity growth with competitive procurement. Examples in our coverage such as tunisia solar park underscore how large projects are being sequenced to meet grid needs and industrial demand. Likewise, evolving onshore capacity highlighted in tunis wind illustrates the role wind resources can play as the second phase of this Turkiye-Saudi program comes into view.

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