President Recep Tayyip Erdogan has ratified an agreement granting Saudi Arabia zero-cost land, tax exemptions and offtake assurances for two gigawatts of solar projects, Turkey’s Official Gazette showed on August 28.

The agreement, signed in Riyadh back in February, lays the foundation for a 5-GW solar energy rollout across Turkey. Following the initial 2-GW stage, a second phase will deploy an additional 3-GW of solar capacity.

Under the initial phase, the Saudi government will construct two major solar plants in the central Anatolian Sivas province and the southern Taseli plateau located across Konya, Karaman and Mersin provinces. Each plant will have a 1-GW capacity.

Guarantee covers 100% of output for 30 years

To insulate the Saudi government from the chronic inflation and currency volatility that have long plagued Turkey's economy, Ankara has agreed to price all electricity purchases strictly in euros. Turkish government-run electricity producer EUAS has committed to purchasing 100% of the generated power for a 30-year duration.

During the first five years of commercial operation, the government will pay a premium rate of €47.50/MWh for electricity generated at both the Sivas and Taseli plants, excluding VAT. After year five, tariffs will adjust to €23.415/MWh for Sivas and €19.950/MWh for Taseli, maintaining a stable, hard-currency revenue floor over the entire multi-decade contract lifespan.

Land grants and zero-tax

Beyond offtake assurances, Ankara is also extending operational privileges. EUAS will directly acquire all the necessary land as well as easement and forestry usage permits for 49 years and lease the property back to the project companies at zero cost.

Furthermore, the projects will be automatically classified under Turkey's high-tier "Strategic Move Programme," granting corporate tax exemptions without the requirement for a standard investment incentive certificate. Machinery, capital equipment, and spare parts imported for construction and maintenance will be completely exempt from customs duties, value-added tax (VAT) and special consumption tax (OTV).

Domestic procurement will similarly enjoy VAT immunity while all contracts signed prior to commercial operation are exempt from stamp duty.