Acwa and the Saudi Power Procurement Company (SPPC) have entered into a power purchase agreement (PPA) for the expansion of the Rabigh 2 Independent Power Plant (IPP) in the Makkah Region of Saudi Arabia.
The agreement carries a contract value of SR11.5bn ($3bn) and involves the development of a gas-fired combined cycle power plant with a planned total capacity of 2.31GW.
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The project also makes provision for future carbon capture technology and includes the expansion of a 380kV electrical substation to support the national grid.
Under the terms of the agreement, Acwa will hold a 40% equity share in the project.
The contract covers the development, financing, construction, ownership and operational responsibilities for the new power plant, as well as the relevant substation works.
This project aligns with Saudi Vision 2030 and ongoing energy initiatives in Saudi Arabia, which include efforts to modernise the sector and support grid reliability.
The commercial operation period for the plant is set for 31 years from the commencement of its activities.
Acwa Saudi Arabia Country general manager Omar Al Hassan said: “The signing of this power purchase agreement marks an important milestone for Acwa and reinforces our commitment to supporting the continued development of the kingdom’s electricity infrastructure.
“The Rabigh 2 IPP Expansion Project will play a meaningful role in enhancing generation capacity and strengthening supply reliability, while contributing to Saudi Arabia’s broader energy transition objectives.”
The financial implications will be disclosed after the project reaches financial close.
Both entities involved in the PPA confirmed that the contractual arrangement aims to add significant generation capacity to Saudi Arabia’s electricity supply infrastructure.
Acwa Saudi Arabia and Middle East regional business development VP Khaled Al Medbel said: “This agreement reflects the continued trust and partnership between Acwa and the Saudi Power Procurement Company.”
