Saudi Arabia just slapped about $2 billion on the table to build big solar in Turkey—real grid-scale stuff, not a ribbon-cutting prop in the desert.
The headline numbers are loud: up to 5,000 megawatts (MW) total, starting with 2,000 MW in two central Turkish provinces, Sivas and Karaman. Turkish officials say that’s enough electricity for roughly 2.1 million households. The agreement was inked in Riyadh during President Recep Tayyip Erdoğan’s visit, which tells you this isn’t some random private-sector handshake. This is geopolitics with solar panels.
Two provinces, 2,000 MW: the “phase one” that actually has an address
Phase one is the part that looks concrete: two photovoltaic plants planned for Sivas and Karaman, totaling 2,000 MW.
To put that in American terms, 2,000 MW is the kind of capacity that can matter to a national grid. It’s not a boutique project meant to pad a sustainability report. And the “2.1 million households” claim—while always a little squishy because household consumption varies—signals the scale Turkey wants people to picture: a chunk of the country’s everyday power demand, not a science fair demo.
The real muscle here isn’t the sunshine. It’s the contract: Turkey is talking about having a state-owned company buy the electricity for 30 years. That’s the difference between “nice idea” and “banks will actually finance this.” As one Turkish engineer put it to me at an Istanbul energy event: with a public buyer locked in for 30 years, you can raise debt and build fast; without it, you spend your life calming lenders down.
The price tag that matters: a 30-year guarantee and a dirt-cheap kWh
Saudi officials are bragging that the power price will be “highly competitive” versus other renewables in Turkey. A specific number has been floated: €0.023415 per kilowatt-hour—about $0.025 per kWh at recent exchange rates.
That’s cheap. Suspiciously cheap, even by global solar standards, depending on what’s included (grid connection costs? land? curtailment risk? inflation indexing?). Low headline prices are great for press releases and politics. They’re also how you lock in the argument that this deal helps Turkish consumers and industry.
But a 30-year power purchase agreement cuts both ways. Investors love it because it turns future revenue into something you can borrow against. The Turkish public sector, meanwhile, is signing up for decades of obligations. If demand shifts, if the grid needs expensive upgrades, if energy policy changes, those contracts don’t magically disappear. A former industry executive told me bluntly (and off the record, because of course): solar is easy to install; the system around it is what gets expensive.
And despite the “Saudi money” framing, this doesn’t sound like a single fat check. Part of the financing is expected to come from outside sources, including loans from international financial institutions. Translation: the paperwork, guarantees, and the credibility of that 30-year revenue stream are the fuel. Not vibes.
Up to 5,000 MW: a diplomatic signal wrapped in solar glass
The deal’s ambition goes beyond the first two plants. The stated target is up to 5,000 MW in two phases: 2,000 MW now, then another 3,000 MW later. There’s also talk of a broader package that could blend solar and wind if milestones get hit.
Politically, the signatures matter. Turkey’s Energy Minister Alparslan Bayraktar signed alongside Saudi Energy Minister Prince Abdulaziz bin Salman. When those two names share a document, you’re not looking at a normal commercial transaction. You’re looking at a message: Riyadh and Ankara are tightening ties, and energy is one of the levers.
Still—here’s the part to watch—the second phase is basically a fog bank. No sites. No project-by-project breakdown. No clear timeline. In the power business, “planned capacity” and “MW actually connected to the grid” can be two very different universes if permits, transmission, and financing don’t line up perfectly.
Right now, Turkey has a 2,000 MW plan with locations and a revenue model. The other 3,000 MW is a promise. And promises don’t generate electrons.
Key Takeaways
- Saudi Arabia announced about $2 billion for solar power plants in Turkey.
- A first phase of 2,000 MW targets Sivas and Karaman, supplying power to more than two million households.
- Turkey plans a 30-year government purchase of the electricity, with the kWh price disclosed.
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Frequently Asked Questions
Where will the first Saudi-funded solar power plants be built in Turkey?
The first announced phase covers two provinces in central Turkey: Sivas and Karaman. This initial stage is expected to total 2,000 MW of installed capacity.
What total capacity is targeted by the energy agreement between Riyadh and Ankara?
The agreement mentions a total capacity of up to 5,000 MW. After the 2,000 MW in the first phase, a second phase of an additional 3,000 MW is referenced, without full details on the sites.
Why is the 30-year power purchase agreement central?
A 30-year guaranteed purchase by a public entity secures the project’s revenue. For the investor and lenders, it’s a key factor in financing construction and recovering the infrastructure costs over the long term.
