Türkiye, Saudi Arabia to sign next phase of $5bn energy deal at COP31

Türkiye and Saudi Arabia are set to deepen their energy partnership with the signing of the second phase of a major renewable energy agreement at the upcoming COP31 climate summit in Antalya. The announcement was made by Mohammad Abunayyan, chairman of Saudi Arabia's Acwa Power, following the signing ceremony in Istanbul for the first phase of solar projects in the central provinces of Sivas and Karaman.

3 Gigawatts of New Capacity by Year-End

Speaking to Anadolu Agency (AA) on the sidelines of the Istanbul event, Abunayyan confirmed that the next phase of the government-to-government deal would be finalized at the UN climate conference scheduled for November. "We are going to sign 3 gigawatts in renewable and storage by COP31," he stated. This tranche will cover the remaining capacity under a 5-gigawatt framework agreement established during President Recep Tayyip Erdoğan's visit to Saudi Arabia in February.

The new phase will diversify beyond solar, incorporating a mix of wind energy and battery storage technologies. Abunayyan also noted that the company is evaluating the integration of storage solutions into the initial 2-gigawatt solar projects to enhance grid stability and efficiency.

Accelerated Timeline for Solar Rollout

The first phase of solar projects, signed this week, is progressing on an accelerated timeline. According to Abunayyan, construction is expected to commence next year, following the completion of permitting and environmental approval processes. "We are going to start our dispatch of the first electricity of this 2 gigawatts by the beginning of 2028, and we will be able to produce it all in 2028," he said, describing the initiative as a "very fast track project."

The projects are designed to deliver highly competitive electricity prices while maximizing local content and utilizing Turkish contractors. The total investment under the 5-gigawatt framework is projected to be between $4 billion and $5 billion, structured through project finance combining equity and international debt, with financial close targeted for 2027.

Strategic Alignment with National Targets

Abunayyan praised Türkiye's renewable energy strategy as "ambitious," highlighting the country's goal to add 80 gigawatts of renewable capacity by 2035, aiming for a total of 120 gigawatts in solar and wind. "This project ... is really a starting of this 80 gigawatts," he noted, emphasizing the need to install roughly 9 gigawatts annually to meet the target.

Looking beyond the current agreements, Abunayyan revealed that Acwa is exploring further opportunities in Türkiye, including green hydrogen and desalination projects. "The green hydrogen is the energy of the future," he stated, linking long-term decarbonization efforts to the continued expansion of renewable energy combined with storage. He framed the COP31 signing as a powerful diplomatic gesture, demonstrating that "Türkiye and Saudi Arabia, they are not only giving promises or talks, they are implementing."