AGP Executive Report

AI Infrastructure & Policy: Türkiye set a $10bn AI investment goal and targets 1GW of data-centre capacity by 2030, while the Industry and Technology Minister outlined an AI roadmap at the G20 that includes training 5 million people and opening public datasets to developers. Defense Industry & Exports: The Defense Ministry highlighted Baykar’s drone ecosystem and exports, and also said Eurofighter Typhoon pilot training for the Turkish Air Force starts Sept. 7. Rail Manufacturing: Winton Industries won TSI approval for its 82m³ Uacns silo wagons in aluminium and carbon-steel, clearing a key regulatory barrier for European rail freight. Shipping & Safety: Authorities detained nine crew after a collision off Istanbul sank the Tuğberk İmamoğlu; separate reports also flagged cargo-ship incidents in the Marmara. Finance & Corporate Risk: Cable maker Alves Kablo defaulted on a TRY 309.7mn sukuk payment, citing liquidity stress and failed follow-on funding. Media & Content: Warner Bros. Discovery and Doğuş Media agreed to co-finance and co-broadcast Turkish scripted series, with Tuzlu Kahve set for Star TV then HBO Max. Tech Services: Reports of Google Gemini outages hit multiple countries, including Turkey.

Black Sea Shipping Safety: Turkey is searching for 10 crew after a Turkish-flagged bulk carrier sank following a collision in the Marmara Sea near Istanbul; authorities say the sinking was rapid and rescue teams are still scouring deep waters. Aviation Disruption Risk: Ukraine warned Russian airspace is becoming unsafe due to Ukrainian drones, and reports say airlines including Pegasus and Turkish Airlines have started suspending or cutting flights to Russian airports. Energy & Industry: OCI Energy broke ground on a 260MW solar project in Texas, betting on AI-driven power demand; the project is set to start operations in 2027. Geothermal Clean Power: A Drillmec electric rig shipped from Turkey is heading to the University of York for a four-kilometre geothermal well to cut fossil fuel reliance. Defense & Shipbuilding: The US is considering frigate designs from South Korea, Japan and Turkey for a new warship class, potentially shifting more construction to allied yards. Labor & Mining: A Turkish miners’ union organiser, Başaran Aksu, has launched an open-ended hunger strike in prison. Humanitarian WASH: Türk Kızılay and Cameroon Red Cross signed a deal to expand water, hygiene and sanitation projects.

Maritime Safety: A Turkish cargo ship sank after colliding with another vessel off Istanbul in the Marmara Sea; 10 crew are missing and search-and-rescue operations are ongoing, with experts pointing to likely human error. Aviation Disruption: Pegasus canceled or turned back Russia-bound flights after Zelensky warned airlines and insurers that Russian airspace is becoming unsafe due to “drone-infested skies,” adding pressure to already strained Europe–Asia routing. Airspace Risk Map: A broader analysis argues the Russia airspace closure is now a permanent cost factor for airlines, reshaping fuel, crew planning and ticket pricing. Energy Corridors: Syria is pitching itself as an overland alternative to Hormuz, with oil truck routes and a proposed Chevron-led pipeline to Baniyas gaining attention as sanctions and Gulf conflict reshape flows. Defense & Shipbuilding: The US is considering frigate designs from South Korea, Japan and Turkey for a new warship competition, potentially allowing early builds abroad before shifting to US yards. Power Investment: EBRD approved a loan up to $207m for Enerjisa Enerji to modernize electricity distribution networks across three regions. Regional Strategy: Erdoğan said Turkey could raise SCO ties without breaking with NATO or the West, focusing on energy security and transport corridors.

Turkey-Russia Energy: President Erdoğan and Vladimir Putin used the SCO summit to reaffirm deepening Türkiye-Russia ties, spotlighting Akkuyu as a key pillar and pointing to continued joint energy work. Defence & Industry: Brussels welcomed the Turkey–Saudi Arabia–Pakistan Mecca defence pact, but flagged EU defence-data exposure risks tied to defence-industrial cooperation. Shipping Risk: Turkish shipping lines Akkon Lines and Arka suspended services to all Russian ports after Black Sea attacks, underscoring mounting insurance and operational pressure on Turkish exporters. Aerospace Milestone: Turkish Aerospace Industries completed the first flight of the third Hurjet prototype, a production-representative step toward scaling jet trainer output. Trade & Compliance: A US settlement targets LED transshipment and origin misdeclaration involving Taiwan routing, a reminder for Turkish firms trading into tariff-sensitive markets. Logistics/Heavy Lift: COLI Group delivered 14 GE Vernova transformers from Türkiye to Poland for Baltica 2, highlighting port-to-road bridge and winter transport challenges. Climate Diplomacy: Turkey’s COP31 hosting plan is paired with a Fiji pre-COP event, with costs and attendance expectations drawing scrutiny.

Nuclear Expansion: President Erdoğan told Vladimir Putin in Bishkek that Turkey and Russia will pursue new nuclear power projects after Akkuyu starts operations, signaling additional plants beyond the Mediterranean site. Defense Tech Showcase: ASELSAN displayed its unmanned naval systems at TEKNOFEST Mavi Vatan 2026, including KILIÇ (autonomous underwater) and TUFAN (kamikaze surface), alongside key air and maritime components. Space Industry: Turkey signed the Artemis Accords as the 71st signatory, with plans for its first lunar mission AYAP-1 in 2027. Archaeology & Mining Heritage: Turkish archaeologists uncovered an 8,800–8,900-year-old copper-working workshop at Çayönü Tepesi, adding to evidence of early organized metal production. Maritime Safety: Search efforts continue off Kyrenia after a ferry capsized; a deep-sea team located a suspected wreck at 550 meters, with additional rescue vessels expected. Climate Policy: Turkey’s COP31 president Murat Kurum said Antalya will focus on an “implementation” action plan with concrete solutions, not more targets. Regional Water Security: At the SCO summit, Pakistan PM Shehbaz Sharif urged that water must never be weaponised, citing the Indus Waters Treaty.

Artemis Accords: Türkiye became the 71st signatory to NASA’s Artemis framework, with Industry and Technology Minister Mehmet Fatih Kacır signing in Washington—aimed at peaceful, transparent Moon and Mars exploration and data sharing. Makkah Defence Alliance: Turkey, Saudi Arabia and Pakistan moved to institutionalize their Aug. 7 pact, agreeing to set up a Riyadh secretariat and naming Pakistan’s first secretary general for a three-year term, as the alliance seeks a NATO-style “attack on all” deterrence model. Regional Air Defence Race: Israel and Greece signed the “Achilles Shield” deal (about $3.5–$3.6bn) for a multilayered air defence network, combining systems like David’s Sling, Barak MX and Spyder—an upgrade that analysts link to rising tensions involving Turkey. Turkish Defence Industry: Five Turkish firms placed in Defense News’ Top 100 list, led by Aselsan (up to 40th), with strong 2025 sales growth across the group. Maritime Security & Logistics: Somali and Turkish navies freed the hijacked MV Latuf and killed 14 pirates; separately, Turkish container operator Akkon suspended calls to Russian ports over security risks, adding pressure to Black Sea shipping flows. Energy/Trade Infrastructure: Iraq is accelerating plans for new oil pipeline links to Turkey and Syria to bypass Hormuz disruptions, targeting nearly 2.2m bpd capacity.

Makkah Defence Alliance: Türkiye, Pakistan and Saudi Arabia kicked off the first Strategic Political and Defence Committee meeting in Istanbul, aiming to turn the Mecca pact into a more structured deterrence framework, including a permanent secretariat in Riyadh and expanded defence-industry cooperation such as joint technology and production. Air Defence Race: Greece signed a €3bn “Achilles Shield” deal with Israel to build a multilayer air defence network, a move that underlines how regional military procurement is intensifying alongside Turkey’s own defence-industrial push. Turkish Aerospace Milestone: TUSAŞ/TAI flew the first production-representative Hürjet jet trainer for the Turkish Air Force, with deliveries planned from 2027, strengthening Türkiye’s advanced aviation manufacturing pipeline. Economy Watch: TurkStat reported Türkiye’s 2Q GDP growth at 2.3% y/y, while economists expect August inflation to ease to 31.52% ahead of the Sept. 3 release. Logistics & Trade: DP World plans to start building a $288m dry port in Tashkent in October 2026, targeting rail-road freight, warehousing and customs capacity. Maritime Risk: A Russian-flagged cargo ship attacked near Novorossiysk drifted and ran aground on a Turkish beach, adding to Black Sea shipping security concerns.

Black Sea Shipping Risk: Turkish shipowners warn Ukraine-linked attacks are forcing vessels out of service and pushing insurance and operating costs up, raising bankruptcy fears for merchant fleets. Mecca Pact in Motion: Turkey, Saudi Arabia and Pakistan kick off the first Strategic Political and Defence Committee meeting in Istanbul, with ministers and top commanders set to discuss defense coordination, interoperability and joint production. SCO Summit Watch: Erdogan is expected to attend the Shanghai Cooperation Organisation summit in Bishkek alongside Putin and Xi, as leaders weigh regional security and trade/energy cooperation. Iran Pressure Escalates: The US strikes Iranian rocket launchers near the Strait of Hormuz and signals further sanctions on banks tied to Iran transactions, intensifying pressure on regional energy and shipping routes. Tech & Consumer Demand: Middle East smartphone shipments excluding Turkey fell 19% y/y as higher prices and uncertainty push buyers toward premium devices. Aegean Arms Race: Greece is set to sign a major air-defense deal with Israel amid rising Greek-Turkish tensions and drone incidents near disputed islands.

Regional Defence Talks: Turkey will host the first ministerial committee meeting under the new “Mecca Joint Defence Agreement” in Istanbul on Monday, bringing together foreign and defence ministers plus chiefs of staff from Türkiye, Saudi Arabia and Pakistan to set the pact’s operating details, including defence coordination, interoperability and defence-industry cooperation such as joint production and development. Turkish Exports: TurkStat data shows Türkiye’s exports rose 2.9% year-on-year to a record July monthly high of $25.62bn, while imports climbed 5.1% to $32.97bn, widening the trade deficit to $7.34bn. Aegean Maritime Tensions: Greece is set to raise objections at an EU foreign ministers meeting over Türkiye’s newly declared Aegean marine parks, arguing they violate international law. Aviation Milestone: Türkiye’s indigenous HÜRJET advanced jet trainer/light combat aircraft completed its first flight after ground and taxi tests, marking a step toward delivery to the Turkish Air Force. Maritime Safety: A passenger ferry capsized off northern Cyprus with at least seven deaths and more than 172 rescues, as authorities continue search-and-rescue and investigate the cause.

Black Sea Shipping Tensions: Turkey summoned Ukraine’s ambassador after drone strikes hit two Turkish-operated cargo ships near Russia’s Tuapse, injuring five and raising fears of wider supply-chain disruption. Maritime Security: Turkish and Somali forces freed the Cameroon-flagged MV Latuf from pirates off Puntland; authorities said 14 pirates were killed and boats destroyed. Defense Deals in the Region: Greece is set to sign a $3.6b air-defense deal with Israel, dubbed “Achilles Shield,” aimed at threats from Turkey and Iran, while Turkey’s drone ecosystem keeps spreading across MENA. Renewables Cooperation: President Erdoğan approved a Turkey–Saudi framework for renewable projects, including 1,000 MW solar plants in Sivas and Karaman and a further 3,000 MW pipeline. Industrial Signals: Turkey’s high-tech manufacturing output and domestic solar generation hit new milestones, alongside a reported financing push for manufacturers. Trade & Finance Watch: US sanctions are increasingly squeezing Iran’s hard-currency access, but experts warn regime collapse is not automatic.

Black Sea Shipping Under Fire: Türkiye summoned Ukraine’s ambassador after drone attacks hit two Turkish-operated vessels near Tuapse, with a fire on Lider Bordo Mavi and injuries reported, while Lider Kocatepe was also damaged during towing—raising fresh concerns for civilian navigation and the marine environment. Tourism Cost Pressure: Bloomberg reports Turkey’s “value for money” edge is fading as hotel, dining and leisure prices rise alongside the lira’s depreciation policy, pushing some European visitors to look elsewhere. SCO Summit in Bishkek: Leaders of 17 countries plus UN chief António Guterres will attend the SCO summit on Sept. 1, with Türkiye’s Erdoğan among the expected participants. Defense Diplomacy: Turkish FM Hakan Fidan held calls with Qatar and Egypt to coordinate on regional and maritime-security issues. Manufacturing & Industry Finance: Türkiye unveiled a large financing package for manufacturers, while coverage also points to growth in high-tech production. Aviation Demand: Türkiye saw a sharp jump in UAV pilot applications in 2026, with millions of drones registered.

Aegean Tensions: Turkey said Greece’s new Special Spatial Planning Framework for Industry and the Supply Chain covering parts of the Aegean has “no legal consequences” for Ankara, urging Athens to stick to the 2023 Athens Declaration. AI Governance: Türkiye approved a National Artificial Intelligence Board chaired by President Erdoğan to set AI priorities, steer investment and publish annual progress, alongside an ethics board to guide bias, data use and oversight. Energy & Industry Finance: Erdoğan approved a Türkiye–Saudi renewable energy framework for solar plants in Sivas and Karaman (1,000 MW each) with further 3,000 MW in phases. Manufacturing Push: Türkiye unveiled a large financing package aimed at manufacturers, as confidence and high-tech output continue to be highlighted in recent coverage. Maritime Security & Trade Routes: With the Strait of Hormuz reopening discussed via a temporary Iran–Oman corridor, shipping risk remains a live issue for regional logistics and energy flows. Defense Diplomacy: Turkey’s role in the evolving Mecca Joint Defense Agreement and wider regional security architecture continues to draw attention, including India’s stated concerns.

Manufacturing Finance: Türkiye unveiled a 250 billion lira employment-linked financing package for manufacturers, with grace periods up to six months and maturities up to 36 months, and a ministry-backed cost reduction for firms that keep employment levels steady. Energy Push: Domestic and solar power hit record monthly highs in July, with solar reaching 5.37 billion kWh and renewables delivering 58.2% of total generation. Industrial Scale-Up: TurkStat says Türkiye’s high-tech manufacturing production value crossed 1 trillion lira in 2025, with high-tech enterprises rising 40% over five years. Trade & Reconstruction: Turkey’s trade with Syria jumped 42% to $3.75 billion, as Ankara steps up support for Aleppo’s industrial revival. Regional Shipping Risk: Turkish shipowners warn Black Sea attacks could drive operators toward bankruptcy, pushing some vessels into long-term lay-up. AI for Healthcare: Researchers in Turkey propose a privacy-preserving machine-learning framework to build predictive models across institutions without pooling sensitive raw data. Security Pact: Türkiye, Saudi Arabia and Pakistan formalized the Mecca Joint Defence Agreement, with Pakistan calling it a “message of unity and peace.”

EU Carbon Rules for Industry: Hyundai Steel briefed Turkish auto-parts clients in Izmit and Bursa on the EU’s CBAM, including expanding coverage to steel derivatives, auto parts and home appliances, and what firms need to do to stay compliant. Black Sea Security Procurement: Bulgaria approved the purchase of seven mine-hunting ships to expand NATO-aligned mine countermeasures with Romania and Türkiye, aiming to better protect shipping routes. Iran Trade Pressure: Iran’s president urged Muslim states not to let their soil be used for attacks, as the US escalates sanctions threats and Tehran scrambles to sustain trade. Strait of Hormuz Risk for Shipping: Reports of another tanker hit in the Strait of Hormuz underline how quickly maritime disruption is spreading across the region’s energy supply chain. Ukraine Industrial Hit: Russia’s long attack wave targeted ports, grain storage, energy and industry, with multiple missile and drone interceptions reported. Türkiye–Iraq Logistics Push: Türkiye and Iraq are deepening cooperation around Baghdad’s Development Road corridor, seeking an overland route to Europe amid Hormuz disruption. Public Access vs Water Use: A dam-related dispute in Michigan highlights how licensing renewals can reshape access to water resources.

Turkey’s Green Push: Türkiye published the regulation for its Emissions Trading System (TR ETS), aiming to cut greenhouse gases and align monitoring and market rules with the EU ETS. Competition & Pharma: Turkey’s Competition Board opened an investigation into Israeli drugmaker Teva over claims it used patent tactics and misleading steps to block generics. Energy Links: Armenia said it is discussing electricity imports with Azerbaijan, Georgia, Iran and Türkiye, including an EU-funded converter station on the Georgia border. Sunflower Supply: Turkey will cut sunflower seed import tariffs earlier than usual for the 2026/27 season to protect processor input costs and limit refined oil price pressure. Mining & Labor: Turkish courts ordered pretrial detention of two mine union leaders over social media posts, with unions calling it a move to silence protests over unpaid wages. Trade & Industry Snapshot: New data shows services dominate Türkiye’s enterprises and employment, while manufacturing remains concentrated in low-technology activities. Regional Security: Ankara welcomed SDF/YPG dissolution in Syria, reiterating support for a stable, unified Syria.

Sanctions Push: Zelenskyy’s Capitol Hill pitch helped unlock a major Russia sanctions package in the US Senate, with lawmakers framing it as both military support and morale boost—while next steps remain unclear. Defence Industry Partnership: Nigeria reiterated its drive for a self-reliant defence industrial base and renewed focus on technology transfer and local production with Türkiye at the 7th Nigeria–Türkiye defence forum in Abuja. Regional Security Realignment: Commentary and analysis around the Türkiye–Pakistan–Saudi “Mecca pact” points to a potential new Middle East security architecture and knock-on effects for Iran and US influence. Cyber & Tech Security: The US disrupted a Chinese hacking operation targeting sensitive networks tied to the Justice Department, NASA and the Federal Reserve; China denied the claims and accused Washington of smearing. Turkey’s Trade & Logistics: Turkey’s TUSAF chairman urged wheat supply diversification amid Black Sea shipping risks, as millers look to alternative origins to manage war-risk insurance and freight spikes. Energy Routes Watch: Bulgaria’s renegotiation of its BOTAŞ gas deal highlights how Turkey-linked LNG access is reshaping regional energy security after Russia cuts. AI in Defence: NATO’s Indo-Pacific Four partners are urged to learn from NATO’s AI-enabled decision support as they move toward AI integration in military planning.