ACWA Power secures €2.8bn Saudi power plant procurement contract

ACWA Power has signed a SAR 11.5 billion (€2.8 billion) contract with Saudi Power Procurement Company for the Rabigh 2 power plant expansion, a 2.3 gigawatt facility serving Saudi Arabia's Makkah region. The procurement represents one of the largest power generation contracts in the Middle East, supporting electricity demand growth and grid capacity requirements.

Solar Quarter reported that the power purchase agreement covers design, construction, financing and operation of the Rabigh 2 combined-cycle gas turbine power plant. ACWA Power will develop the facility under a build-own-operate model, selling electricity to Saudi Power Procurement Company under long-term offtake arrangements.

The 2.3 gigawatt capacity addition addresses electricity demand growth in the Makkah region, which includes Islam's holiest sites and experiences seasonal demand surges during pilgrimage periods. The Rabigh 2 plant will provide baseload generation capacity whilst supporting grid stability and reserve requirements.

The procurement follows competitive tender processes conducted by Saudi Power Procurement Company, the government entity responsible for securing power generation capacity on behalf of the Saudi Electricity Company. Power purchase agreements specify pricing, performance standards, dispatch protocols and operational obligations over multi-decade contract periods.

ACWA Power operates as a major independent power producer across the Middle East, with portfolio spanning thermal generation, renewable energy and water desalination projects. The Rabigh 2 contract adds significant thermal capacity to ACWA Power's Saudi operations, complementing the company's renewable energy investments.

Combined-cycle gas turbine technology provides efficient electricity generation using natural gas, with the Rabigh 2 facility incorporating heat recovery systems capturing waste heat from gas turbines to generate additional power through steam cycles. The technology delivers higher efficiency compared to simple-cycle generation.

Read comprehensive analysis of ACWA Power's Rabigh 2 power plant procurement and Saudi electricity capacity expansion.