Saudi Arabia-based energy company ACWA Power is preparing to invest a total of 5 gigawatts (GW) of renewable energy in Turkey. According to the statement made by Minister of Energy and Natural Resources Alparslan Bayraktar, in the first phase of the investment, two large solar power plants with a capacity of 1 GW each will be built in the provinces of Karaman and Sivas. Following this first phase of 2 GW, negotiations are ongoing for an additional capacity of 3 GW. The agreement is expected to be official in a few days.

Saudi Arabia to make a huge energy investment in Turkey

The total size of the investment will be around 5 billion dollars. ACWA Power plans to manufacture the solar panels and other equipment to be used in this project by companies in Turkey. Thus, the project will also have a structure that encourages domestic production.

Minister Bayraktar evaluated this investment as an important example of direct foreign capital inflow to Turkey. ACWA Power previously had an energy investment in Turkey. The company entered the Turkish market with a 950 megawatt (MW) natural gas power plant opened in 2017. With the new project, ACWA Power is expanding its activities in Turkey in the field of renewable energy after natural gas.

The investment draws attention not only in terms of capacity but also in terms of cost. Bayraktar stated that the lowest electricity purchase price ever made in Turkey was provided with this agreement, but did not share the exact figure. In the YEKA competitions held in January, a bid of $0.0325 per kilowatt-hour was submitted. It is evaluated that the new agreement may have fallen below these levels.

Official documents state that Turkey aims to increase its total renewable energy installed capacity to 120 GW by 2035. In line with this goal, international collaborations and large-scale investments play a decisive role in the energy transformation process.