AGP Executive Report

AI & Industry Push: Türkiye’s Artificial Intelligence Summit in Istanbul kicked off with a national AI action plan targeting at least $10B in mostly private investment, 1 GW of installed data-center capacity by 2030, and 2% of public investment earmarked for AI projects, alongside new generative AI work such as the local model “Bilge”. Solar Manufacturing Boom: Türkiye’s solar glass capacity jumped fivefold in a year to 87 million sq m by end-2025, with the sector exporting to 170 countries and warning that unfair imports could undermine new capital and jobs. Trade Flows: Türkiye’s exports to Ukraine surged in May by nearly $340M to almost $656.6M, driven by rising Ukrainian demand for industrial and energy equipment. Security & Governance: The Turkish National Security Council is expanding its outreach via new conferences aimed at broadening participation beyond top commanders and ministers. Maritime Tourism: Bodrum’s summer season is already bringing heavier yacht traffic, with operators warning that private vessels are crowding access for sightseeing boats.

AI & Data Infrastructure: Türkiye’s President Erdoğan unveiled a new AI Action Plan, targeting at least $10bn in private investment for data centers and AI infrastructure, 1 GW installed data-center capacity by 2030, a National Data Library with 2,000 public datasets (including agriculture and defense), and training for 10,000 advanced AI specialists plus 100,000 AI application professionals. Tech Sovereignty: Baykar chief Selçuk Bayraktar warned at an AI summit that global tech monopolists can undermine national independence via algorithmic control over supply chains, data centers and devices, urging transparent open-source ecosystems. EU Trade/Sanctions Risk: A new EU sanctions proposal tied to Russia includes entities based in India and also lists countries including Turkey, raising uncertainty for an EU-India trade deal still awaiting ratification. Regional Security & Energy: Reports say the US and Iran are close to an MoU framework that could reopen the Strait of Hormuz and extend a ceasefire, while Pakistan says a deal could be signed within 24 hours. Competition Policy: OTS member states met in Shusha to share competition-policy cooperation, with Turkey’s Competition Authority participating. Aviation/Operations: SriLankan Airlines said a lightning strike forced a safe return of an A330 after engine impact.

Turkey–Saudi Logistics Push: Turkey and Saudi Arabia signed MoUs to expand logistics and railways, with reports saying a new overland corridor could link the Persian Gulf to Europe via Syria and Jordan—sparking Israeli concerns about reduced reliance on Israeli infrastructure. Egypt–Turkey Defence Reset: Egypt and Turkey held their first joint F-16 air exercise in nearly 20 years, signaling deeper military coordination after years of strain. Regional Business & Investment: North Macedonia’s PM invited Turkish investors at a Türkiye–North Macedonia business forum in Istanbul, pitching access to European supply chains and a better business climate. Macroeconomic Policy: Turkey’s finance leadership said disinflation remains on track despite shocks, targeting a manageable current account deficit and continued fiscal discipline. Competition Policy in the Turkic Space: The Organization of Turkic States’ competition authorities forum opened in Shusha, bringing together regulators including Türkiye to discuss regional cooperation on fair markets. Energy & Markets Watch: Oil prices eased after Trump paused planned Iran strikes, though investors stayed cautious as Iran’s position on any deal remained unclear. World Cup Spotlight (Turkey in Group D): Australia faces Turkey in Vancouver as the tournament begins, while the US opened with a 4-1 win over Paraguay—setting the stage for Turkey’s next Group D test.

COP31 Pressure: Nearly 100 NGOs urged Turkey and Australia to “lead by example” by cutting reliance on coal, oil and gas ahead of COP31, arguing fossil fuels are the top driver of the climate crisis. Energy Diplomacy: Bulgaria’s PM Rumen Radev said Türkiye wants to renegotiate the BOTAS deal to boost gas transmission and also expand electricity transport links, with talks tied to arrears and a possible second rail line. Defense & Aerospace: Boeing pulled out of the U.S. Navy’s T-45 replacement competition for the Undergraduate Jet Training System, leaving a smaller field for new naval pilot training. EU Trade/Geopolitics: The EU’s 21st sanctions package against Russia includes entities based in India and also mentions Turkey among countries covered, potentially complicating ratification of an EU-India trade deal. Industrial/Logistics Risk: A Turkish-owned bulker seized in Nigeria for cocaine smuggling saw a Nigerian court accept a plea deal, with fines totaling about $6m and potential vessel auction if unpaid. Turkey Spotlight: Turkish police detained 22 suspects, including entertainment figures such as Beren Saat and Kenan Doğulu, in anti-drug raids in Istanbul and Muğla. Aviation/Markets: Airline industry coverage flags fuel-cost pressure from the Iran war and supply-chain strain, with Turkish Airlines’ grounded fleet cited as an example.

White Meat Crackdown: Turkish prosecutors placed major poultry producers under court supervision and detained 32 executives across eight provinces over alleged market manipulation and unjustified price hikes, with Justice Minister Akın Gürlek citing consumer harm. Inflation Watch: TurkStat data showed Türkiye’s domestic producer prices rose 28.93% year-on-year in May, led by energy costs, while the central bank kept policy at 37% and officials said disinflation is set to resume after a short delay. Energy & Trade Risk: With the Strait of Hormuz in focus amid US-Iran tensions, analysts warn that any move targeting Iran’s Kharg Island could endanger troops and prolong the conflict—raising new pressure on regional supply chains. Africa Strategy: Ankara’s push in Niger is framed as shifting from aid to long-term deals spanning defense, mining, energy and infrastructure. Regional Economy: The World Bank cut Romania’s growth outlook to near zero this year, citing Middle East-driven energy and commodity shocks. Logistics Links: Türkiye and Saudi Arabia signed new transport and railway cooperation steps aimed at deeper regional connectivity.

US-Iran Tensions & Energy Trade: Trump cancelled planned strikes after saying Iran’s top leadership approved a “great settlement,” with talk of a deal signing in Europe within days and a potential reopening of the Strait of Hormuz; Iran counters that no final decision is made, keeping uncertainty high for global shipping and oil flows. Türkiye-Bulgaria Energy & Connectivity: FM Hakan Fidan said expanding gas transmission capacity from Türkiye to Bulgaria is strategically vital for Eastern Europe’s energy security, with work to update the BOTAS-Bulgargaz framework and push “green energy” transmission plans. Border Infrastructure: Fidan also confirmed Türkiye and Bulgaria reaffirmed plans for a new border crossing north of Kapikule, alongside capacity upgrades and road/rail projects to strengthen regional supply chains and the Middle Corridor. Defense Industry Pulse: Turkish Aerospace Industries chief Mehmet Demiroğlu claimed Türkiye is “far ahead” of European rivals in sixth-generation fighter work, while UK Defence Secretary John Healey resigned over delayed defense spending plans ahead of a NATO summit in Turkey. Turkish Monetary Policy: Türkiye’s central bank held the policy rate at 37% for a third straight meeting, citing tight conditions and a temporary war impact. Compliance/LegalTech Investment: Compuvi raised seed funding at a $40m valuation to scale Confinaid’s preventive compliance risk platform, backed by a Turkish investor and Ozay Law Firm.

BYD Watch: Turkey suspended BYD’s import tax exemptions and warned of incentive clawbacks if the Chinese EV maker misses its $1bn Manisa commitment, while the Industry and Technology Ministry says the investment deal and guarantees remain valid even as BYD puts the Turkey plant on hold. EV Policy & Oversight: Parliament questions BYD’s stalled construction progress; the ministry says incentives are project-based with compliance checks and repayment rules if milestones aren’t met. Energy Storage: YESS Power commissioned a 30 MW battery storage system in North Macedonia, a first for the Balkans, co-developed with Cubenergy to boost solar integration and grid stability. Construction Momentum: Türkiye’s construction spending jumped 44% in 2025 to 9.09tn liras, supported by earthquake reconstruction and urban transformation, though financing costs are starting to weigh on late-year activity. Telecom Scale-Up: Türk Telekom’s Netsia BB Suite passed 1m homes passed, expanding open-source fiber access across all 81 provinces. Agriculture Exports: Strong cherry yields are expected to lift Türkiye’s exports this year, with Europe and Russia the main destinations. Diplomacy: Hakan Fidan met Greece’s counterpart in Sofia, urging a cooperative Eastern Mediterranean approach and stressing respect for international law.

Maritime & Connectivity: Türkiye and Saudi Arabia signed MoUs to boost logistics services and railway cooperation, with plans linked to modernising the Hejaz Railway and creating alternative trade routes beyond the Strait of Hormuz. Energy & Finance: The EIB signed a €200m clean-energy financing package with Turk Eximbank and TKYB to on-lend to Turkish SMEs, while Türkiye also secured fresh EIB support for its green transition. Industry & Trade: Canada and Türkiye agreed to restart exploratory free-trade talks, with both sides pointing to opportunities in clean energy, aerospace and mining. Refugees & Social Policy: Türkiye’s temporary protection population of Syrians fell to 2.2m in 2026, while irregular apprehensions dropped sharply in 2026’s first months, as returns continue. Defense Tech: A Turkish firm claims a spray-on radar-absorbent coating for drones, aiming to reduce radar detectability. Corporate Watch: BYD has paused its planned €1bn Turkey EV plant, shifting focus to Hungary for its first EU production. Regional Diplomacy: Azerbaijan, Georgia and Türkiye held a trilateral foreign ministers’ meeting in Istanbul, prioritising the Middle Corridor, Baku–Tbilisi–Kars rail and energy security. Security Context: US-Iran tensions keep rising, with Trump warning of further strikes if peace talks stall.

Nuclear Power: Türkiye’s Akkuyu NPP hit a major commissioning step by loading 163 mock fuel assemblies into the first reactor unit, a rehearsal for real fuel loading and aimed at first electricity by year-end. Green Finance: Türkiye secured €200m from the European Investment Bank for its green transition, split between sustainable industry support and green export financing via Türk Eximbank. Energy Transition: At COP31 talks in Bonn, Türkiye put electrification front and center, pushing a voluntary goal of electricity reaching 35% of global energy demand by 2035. Rail & Logistics: Türkiye and Saudi Arabia signed landmark transport and railway MoUs, with plans to extend the corridor toward Oman as an overland trade route bypassing the Strait of Hormuz. Regional Trade Routes: Amid Hormuz-linked shipping risks, Malaysia said it is seeking new fuel sources (including Africa and Turkey) but must match refinery processing needs. Industrial Tech: Quality Power signed a term sheet to acquire WSIL, expanding high-voltage insulator manufacturing capacity. Healthcare Oversight: Türkiye rolled out an antibiotic use surveillance system across adult hospital wards to curb antimicrobial resistance. Global Industry Events: UFI’s European Conference drew record attendance in İzmir, reinforcing Türkiye’s MICE clout.

Rail & Logistics Deals: Turkey and Saudi Arabia signed MoUs in Riyadh covering railway cooperation, logistics services, infrastructure, technology transfer and workforce training, with a framework aimed at reviving the historic Hejaz Railway and eventually extending connectivity toward Oman as an alternative Gulf-to-Mediterranean trade route. Energy & Climate Policy: COP31 hosts Turkey and Australia unveiled a “35 by 35” electrification push, aiming to lift electricity’s share of final energy demand to 35% by 2035, using heat pumps and electric vehicles to cut fossil-fuel reliance amid volatile energy markets. Science & Youth Tech: Türkiye’s T3 Foundation won a major European science communication award (ECSITE Bright Spark), highlighting its hands-on model via TEKNOFEST and DENEYAP Makers Labs. Infrastructure & Heritage: Construction on the Silvan Dam in Diyarbakır continues despite expected village submergence and environmental disruption, while restoration of the historic Stone Bridge in Amed is criticized for losing original character. Maritime & Labor: Four Indian sailors stranded for 10 months on an abandoned container ship off Istanbul were finally taken off, underscoring ongoing vessel abandonment risks.

Azerbaijan–Turkey Gas Deal: SOCAR-led Baku Energy Week delivered about $7.5bn in commercial energy agreements, highlighted by a 15-year Absheron Phase 2 gas sales pact: BOTAS to buy 33 bcm, with output expected to triple to at least 4.5 bcm/year as TotalEnergies targets final investment decision this year. Aviation Expansion: Turkish Airlines plans to expand its direct ultra-long-haul network from late 2027, using Airbus A350-1000 configured for up to 17-hour non-stops, including potential Istanbul links to Buenos Aires and Lima, while managing tight 2026 fuel-cost pressures. Defence Tech Link-Up: Bulgaria’s BlackBelt Technologies debuted at IDEES Plovdiv with its Forge-OS autonomy software and opened exploratory technical talks with Turkey’s TEUSAN, signaling more European “sovereign” guidance competition. Pharma Trial Milestone: GEN Pharmaceuticals dosed the first patient in its Phase II proof-of-concept SHEPHERD trial for SUL-238 in early, untreated Parkinson’s, aiming to test mitochondrial dysfunction targeting. Cyber/Trust Automation: NicSRS says its sslTrus brand is gaining traction as certificate lifecycles shorten, expanding into cloud code signing and broader enterprise certificate lifecycle management. Shipping & Logistics: CU Lines launched a Turkish subsidiary, building a Turkey hub to interconnect trunk-and-feeder services across the Eastern Mediterranean, North Africa and the Black Sea, linking routes toward Europe–Asia–Africa trade lanes. Trade Talks: Türkiye and Canada agreed to launch exploratory discussions toward a free trade agreement, with energy flagged as a key cooperation area.

Energy Transition Watch: Ember data shows global gas’s share of electricity slipping for a fifth straight year, with Turkey among the biggest drops, as solar and wind keep gaining—while Middle East supply worries could push the shift faster. Turkey–Venezuela Trade Push: President Erdoğan met Venezuela’s acting President Delcy Rodríguez in Istanbul to expand cooperation in trade, energy and mining, targeting $3bn in bilateral trade. Maritime Policy Delay: Turkey postponed the “Blue Homeland” maritime jurisdiction bill tied to EEZ and shelf claims, likely until after the summer recess, easing tensions ahead of the NATO summit in Ankara. Aviation & Connectivity: Canada and Türkiye launched exploratory talks for a free trade agreement and flagged renewable energy, nuclear cooperation and aerospace/defence industry links. COP31 Energy Stakes: Turkey’s COP31 chair Murat Kurum warned in Bonn that fossil-fuel dependence and unstable energy markets make stronger clean-transition action urgent. Offshore Wind Fleet: Acta Marine delivered the CSOV Acta Gemini from Tersan Shipyard for a long-term charter supporting the Sofia Offshore Wind Farm. Regional Diplomacy: Azerbaijan, Georgia and Türkiye held their 10th trilateral foreign ministers’ meeting in Istanbul, signing a declaration and reaffirming rail and energy connectivity plans.

Defense & Shipbuilding: STM launched RAJA LAUT, the second corvette for Malaysia’s LMS Batch II project, in Istanbul, with the third ship due in August—another sign of Turkey’s naval export push. Aviation & Connectivity: Turkish Airlines plans to add ultra-long-range Airbus A350-1000 aircraft from late 2027, enabling non-stop flights up to 17 hours and expanding reach to Australia and South America. Manufacturing Demand Pulse: Istanbul Chamber of Industry’s export climate index rose to 50.3 in May, showing only marginal improvement, with weakness flagged in parts of Europe but steadier activity in the US and recovery signals in the Middle East. Regional Diplomacy with Industry Links: Venezuela’s interim president Delcy Rodríguez will meet Erdoğan in Istanbul, with past cooperation spanning defense, energy, tourism and agriculture. Trade & Logistics Disruption: Middle East strikes around Iran-Israel tensions are pushing oil up about 5% and raising fresh shipping risk concerns tied to the Strait of Hormuz. Maritime Labor: Four Indian sailors stranded for 10 months on an abandoned ship off Istanbul were evacuated, highlighting ongoing vessel abandonment problems. Textiles/Exports: Sahinler Egypt expanded its ready-made garment capacity, targeting about $55m in exports by 2026.

Defence Industry: UK, Ukraine, France and Germany urged an “immediate and complete ceasefire” after Russia’s Oreshnik missile strikes, while also pushing for faster production of interceptors and deep-strike capabilities ahead of the NATO summit in Ankara. Energy & Shipping: The US Treasury expanded sanctions on Iran-linked LPG carriers, blacklisting six more vessels and targeting traders tied to front companies in UAE free zones. Middle East Energy Corridors: Iraq says it plans to raise oil exports via Syria and Turkey to 650,000 bpd, boosting flows through the Turkish port of Ceyhan and overland routes. Agriculture & Forestry Cooperation: Turkey’s Agriculture minister met his counterpart in Istanbul to discuss forest, rangeland and nature reserve management, plus seed, genetic resources and smart irrigation tech. Local Business & Services: Cafes in Istanbul and Ankara started limiting laptop use and Wi‑Fi, citing higher operating costs and aiming to increase customer turnover. Regional Trade: Azerbaijan used the St. Petersburg forum to push logistics and investment ties, including talks with Turkey on transit and e-commerce.

Central Banking Watch: Türkiye’s Central Bank Monetary Policy Committee meets June 11, with most analysts expecting the one-week repo rate to stay at 37% as inflation edges up to 32.6% in May. Regional Energy & Trade Corridors: Türkiye’s transport minister says the modernised Hejaz Railway could be extended toward Oman to create an alternative route to the Strait of Hormuz, while Ankara also pushes connectivity projects like the Zangezur corridor segment. Defense & Industry Signals: MPs in the UK scrutinise the £6.3bn Ajax armoured vehicle programme over safety and delivery delays, warning it may never be fit for combat—an issue that feeds into broader defence industrial planning. South Caucasus Cooperation: Foreign ministers from Türkiye, Azerbaijan and Georgia meet in Istanbul to review trilateral cooperation, with emphasis on transport links, energy security and commercial ties. Shipping Disruption Risk: The US says it shot down two more Iranian drones near the Strait of Hormuz, underscoring ongoing pressure on maritime traffic and energy logistics.

Energy Diplomacy: Turkish energy firm Karpowership’s power contract talks in Guyana are back in the spotlight after the government finally confirmed negotiations are ongoing, following public pressure and fears over grid stability. Defence & Industry Oversight: UK MPs warned the troubled £6.3bn Ajax armoured vehicle may never be combat-ready, while they also criticised delays to the Defence Investment Plan. Unmanned Strike Tech: Türkiye moved beyond drone bomb-carriage by fielding Roketsan’s İHA-230 supersonic ballistic missile on combat drones, extending stand-off precision strike capability beyond 150 km. Black Sea Shipping Risk: A Turkish-flagged fishing trawler sank after an apparent attack off Crimea, underscoring rising dangers for civilian shipping in the Russia-Ukraine spillover zone. Turkey-Bangladesh Strategic Ties: Ankara and Dhaka agreed to annual foreign-minister consultations and annual 2+2 defence talks, with cooperation also covering Rohingya, trade, investment and joint production. Global Governance Critique: Turkish Parliament Speaker Numan Kurtulmuş said the UN and other institutions are failing to respond effectively to crises. Business & Social Sensitivity: Turkish justice opened a probe into Rahmi Koç after a viral joke referencing a Kurdish woman, despite his apology.