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Türkiye and Saudi Arabia have approved an intergovernmental agreement setting the framework for cooperation on large-scale renewable energy projects, including two solar power plants with a combined capacity of 2,000 megawatts in the first phase.
The agreement, signed in Riyadh on Feb. 3 and approved by President Recep Tayyip Erdogan, was published in Türkiye’s Official Gazette.
It aims to strengthen cooperation in renewable energy, green technologies and innovation while supporting Türkiye’s energy supply security and green transition goals.
Under the first phase, two solar power plants will be built in Sivas and Taseli, each with a capacity of 1,000 MW.
The agreement also provides for a second phase involving additional renewable energy projects with a combined installed capacity of 3,000 MW.
The locations, electricity tariffs and other conditions for the second-phase projects will be determined through future agreements between the two sides.
Türkiye’s Energy and Natural Resources Ministry and Saudi Arabia’s Energy Ministry will coordinate implementation.
A Saudi company will be designated as the developer by mutual agreement, with Saudi Arabia formally nominating the company through diplomatic channels and Türkiye notifying Riyadh of its approval. A separate project company will be established in Türkiye for each project.
Each investment agreement will remain in force for 30 years from the start of commercial operations, with up to two additional years allowed for decommissioning the facility.
Each project company will provide Türkiye with a guarantee letter calculated by multiplying the agreed installed capacity by €30,000 ($34,900) per megawatt.
The agreement also provides for a mechanism to preserve the projects’ economic balance if future changes in legislation have a positive or negative financial impact.
Electricity generated by the Sivas and Taseli solar plants will be purchased at €47.5 per megawatt-hour for the first five years of commercial operation.
After the fifth year, the tariff will fall to €23.42 per megawatt-hour for the Sivas plant and €19.95 for the Taseli plant. The tariffs exclude value-added tax.
Land rights required for the projects will be acquired by Türkiye’s Electricity Generation Corporation, EUAS, and leased to the project companies.
The Turkish side will also work to ensure that required permits, approvals and licenses are issued without unreasonable delays, that transmission capacity is adapted to the projects and that local labor, goods and services are used where possible.
If the investment and power purchase agreements for the first-phase projects are not signed within 18 months of the intergovernmental agreement entering into force, either side may terminate the agreement without liability.
The agreement will enter into force on the date of the final notification confirming that the necessary domestic procedures have been completed.
Investment agreements will remain valid until the earliest of the agreement’s expiry, termination or 49 years from its entry into force.
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