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Turkish President Recep Tayyip Erdogan’s one-day visit to Saudi Arabia on Tuesday proved that these two regional middle powers, with strong competitive advantages and complementary economic systems, are driving a solid plan for expanding economic ties — but not stopping there. The visit demonstrated that Ankara and Riyadh are speaking the same language: on trade, investment, development and action.
It is not surprising that economic considerations are key factors shaping the new momentum in Turkish-Saudi ties, which is, by its very nature, multifaceted. From the agreements they have signed, it has become evident that Ankara and Riyadh are engaging in promising efforts to bolster their economic ties, while placing their relations on a more sustainable and institutionalized track.
As part of Erdogan’s visit, Saudi Arabia and Turkiye signed a $2 billion agreement to develop large-scale solar power projects in Turkiye. Under the agreement, Saudi companies will construct solar power plants in Sivas and Karaman with a capacity of 2 gigawatts in the first phase. The total capacity of solar and wind power plants that the Saudi Arabian companies will construct is expected to reach 5 GW. The solar power plants are expected to meet the electricity needs of 2.1 million households in Turkiye.
The agreement not only aims to enhance cooperation between the two countries in the fields of renewable energy and green technologies — to which the Kingdom gives special importance — but it also supports the two countries’ diversification goals in terms of energy security and investment strategies. This agreement is among the most significant examples of direct foreign investment in the Turkish energy sector. It is also the realization of a deal signed between two states in 2023 to advance their cooperation in energy, oil and the mining of critical minerals.
Both Saudi Arabia and Turkiye are seeking to direct their investment plans and collaboration in a more strategic way
Dr. Sinem Cengiz
During the major investment forum held on the day of Erdogan’s visit to Riyadh, officials from both sides stated they were targeting $10 billion in bilateral trade by 2026 and $30 billion in the longer term. In 2023, the Turkish and Saudi trade ministers agreed to implement a “robust plan” to increase bilateral trade, especially mutual investments in diverse sectors. We are now seeing this taking shape.
Both Turkiye (through the Century of Turkiye vision) and Saudi Arabia (through Vision 2030) are reconstructing their own economies. Therefore, both are seeking to direct their investment plans and collaboration in a more strategic way. These agreements and understandings show there is a strong will from both sides to strengthen their investment coordination, which could encourage private sector partnerships. They also reflect the development of the mutual trust between the two countries. Mutual trust is strengthened when two countries fully embrace each other’s policies, both political and economic — this has been the case for the Turkish-Saudi regional vision for a while. I believe mutual trust has been built on both sides now, thanks to the working consultation mechanism that has been created.
The main priority of the growing Turkish-Saudi economic momentum is to focus on long-term investment strategies. But it does not stop there. The political elites in both countries want to accelerate trade relations while also moving beyond simple trade figures. What we understand from this visit is that both leaders see economic cooperation not only as a means for capital flow, but also a tool for fostering closer institutional collaboration.
This institutional collaboration will come with the transfer of knowledge and expertise across businesses and institutions alike. Even in areas like the defense industry, which is often seen as purely strategic, there are commercial opportunities that can strengthen economic collaboration between the two countries. For instance, Turkish defense industry products are widely showcased at defense exhibitions and shows across the Gulf, including the World Defense Show in Riyadh, which opens on Sunday.
While stability within these countries is essential for investment and development, stability in the region is equally vital
Dr. Sinem Cengiz
The day after his Riyadh visit, Erdogan announced that Saudi Arabia could make a joint investment in Turkiye’s fighter jet project, KAAN. As in trade, defense cooperation encourages joint planning, standardization and institutional partnerships, which opens space for the involvement of several sectors.
However, the sustainability of the mutual trust and goals to enhance the investment environment require consistency, predictability and, most importantly, economic and political stability. Predictability, both political and economic, is the most important concern for investors on both sides because past negative experience has an imprint on relations. So, long-term confidence-building was an important task for the leaderships on both sides — and the current momentum shows that this has started to bear fruit.
However, while political and economic stability within these countries is essential for investment and development, stability in the region is equally vital. In the current geopolitical context, the boundaries between economy and security are becoming increasingly blurred. Economic interests are never separated from security considerations and, therefore, the recipe for a secure region is an integrated economy through cooperation, with threats eliminated from the domestic and external environments.
It is no surprise that regional security is often mentioned by the Turkish and Saudi leaders, even when signing agreements on trade. Today, Turkiye and Saudi Arabia share overlapping regional interests and both view their own security and stability as inseparable from that of the wider region, from Sudan to Syria and from Yemen to Somalia. This shared vision provides a strong foundation for the current boost in economic ties.
- Dr. Sinem Cengiz is a Turkish political analyst who specializes in Turkiye’s relations with the Middle East. X: @SinemCngz