Riyadh: Trkiye and Saudi Arabia have signed an energy investment agreement valued at approximately $2 billion, focusing on solar power projects within Trkiye, announced the Turkish energy minister.

According to Anadolu Agency, the agreement was formalized in Riyadh, the capital of Saudi Arabia, through the Intergovernmental Agreement on Renewable Energy Power Plant Projects between the two nations. The Turkish Energy Minister, Alparslan Bayraktar, made the announcement on the Turkish social media platform NSosyal, stating that the deal was signed with his Saudi counterpart, Abdulaziz bin Salman Al Saud.

The collaboration aims for Saudi companies to construct solar and wind power plants with a combined capacity of 5,000 megawatts (MW) in Trkiye. As part of the first phase, solar power plant projects with a total capacity of 2,000 MW will be established in the central Anatolian provinces of Sivas and Karaman.

Bayraktar emphasized that these investments will be significant examples of direct foreign investments in Trkiye's energy sector and will be fully financed through external funding, with international financial institutions providing credit. The solar power plants, requiring an investment of around $2 billion, are expected to supply electricity to 2.1 million households.

These projects align with Trkiye's broader energy targets, aiming to reach an installed capacity of 120,000 MW in solar and wind power by 2035. The agreement also includes electricity purchase terms, with specific rates per kilowatt-hour for the plants in Karaman and Sivas.

Trkiye is also targeting 50% localization within the project's scope. The foundation for the solar power plants is expected to be laid in 2027, with the first phase completed by the end of that year, and the entire project finalizing in 2028 and 2029.

The collaboration between the two countries extends beyond this agreement, as Bayraktar mentioned discussions on long-term projects, including a potential electricity transmission line from Saudi Arabia to Trkiye. This project is anticipated to have a significant impact on the whole region.

Bayraktar was part of the delegation accompanying Turkish President Recep Tayyip Erdogan during his visit to Riyadh.