Turkey and Saudi Arabia Advance Renewables Partnership

- The initial 2 GW phase of the 5 GW agreement involves Saudi energy company ACWA Power developing two 1,000 MW solar plants in Turkey's Sivas and Karaman provinces with an investment of approximately $2 billion. The Turkish state will purchase the electricity under a 30-year agreement, with prices fixed for the first 25 years at €1.995 cents per kWh for the Karaman plant and €2.3415 cents per kWh for the Sivas plant—the lowest rates recorded in Turkey for such projects. - The upcoming second phase, to be signed at COP31 in Antalya, will consist of 3 GW of solar, wind, and battery storage projects. This aligns with Saudi-based ACWA Power's broader interest in Turkey, which includes exploring opportunities in green hydrogen and desalination. The total investment for the 5 GW framework is estimated to be between $4 billion and $5 billion. - This partnership supports Turkey's ambitious goal of increasing its installed solar and wind capacity to 120 GW by 2035, a significant jump from the current 40,000 MW. To meet this target, Turkey will need to install roughly 9 GW of new renewable capacity annually. - For Saudi Arabia, this investment is part of its Vision 2030 plan to diversify its economy away from oil and become a global leader in renewable energy. The Kingdom aims to generate 50% of its electricity from renewables by 2030. - The deal mandates that at least 50% of the equipment for the solar plants must be locally sourced, creating a significant opportunity for Turkish manufacturers in the renewable energy supply chain. - While this large-scale infrastructure deal dominates headlines, venture capital investment in Turkish climatetech startups is still nascent. The number of deals has increased, but they are typically small, early-stage rounds. However, the World Bank identifies Turkey as having high potential among middle-income countries to capitalize on the growing global demand for climate technologies. - A key area of opportunity for Turkish startups is industrial decarbonization, supported by the newly launched Türkiye Industrial Decarbonisation Investment Platform (TIDIP). This platform, backed by the EBRD and the World Bank, aims to deploy €5 billion by 2030 to reduce emissions in heavy industries like steel, cement, and aluminum. - For deal sourcing, analysts should watch startups in smart grid technology and energy management, which are crucial for integrating new renewable capacity. Companies like SmartPulse, an AI-based digital energy management platform, and others specializing in SCADA systems and IoT-based energy monitoring are emerging in the Turkish market. Additionally, a Turkish startup, AIS Field, has developed a robotic system for inspecting oil storage tanks, indicating innovation in the broader energy tech sector.