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Acwa and Saudi Energy (formerly Saudi Electricity Company) have signed a 31-year power purchase agreement (PPA) with Saudi Arabia’s principal buyer, Saudi Power Procurement Company (SPPC), for the Rabigh 2 independent power project (IPP) expansion.

The project involves the development of a combined-cycle gas turbine (CCGT) plant in the Mecca region. It will have a total capacity of 2,313.5MW.

The contract is valued at SR11.5bn ($3.07bn), the companies said in separate stock exchange filings.

The carbon-capture-ready power plant will be implemented under a build, own and operate contract, with Acwa and Saudi Energy each owning a 40% stake in the project.

The scope also includes financing and expansion of a 380kV electrical substation.

According to regional project tracker MEED Projects, construction works have commenced on the project and a joint venture of Egypt's Elsewedy Electric and China's Sinohydro has been working as the main contractor.

Rabigh 1 extension

In January, Saudi Energy announced a spearate energy conversion agreement with SPPC for the purchase of electricity from the Rabigh 1 power plant expansion.

The contract is valued at SR5.33bn ($1.42bn).

It covers the development, financing, construction, ownership and operation of the gas-fired power plant, which will have a generation capacity of 1,179MW.

A joint venture of Elsewedy Electric and Germany’s Siemens Energy is undertaking the engineering, procurement and construction work for the project, which is expected to be completed by the end of 2026.

US/India-based Synergy Consulting is the financial advisory consultant to Saudi Energy on this project.

Last October, Saudi Energy signed two further PPAs with SPPC for the PP13 and PP14 CCGT power plants in Riyadh.

The plants have a total capacity of 3,356MW.

Under the contracts, valued at SR12.83bn ($3.4bn), SPPC will purchase the power generated by the plants for 21 years.

MEED’s April 2026 report on Saudi Arabia includes:

> COMMENT: Risk accelerates Saudi spending shift
> GVT &: ECONOMY: Riyadh navigates a changed landscape
> BANKING: Testing times for Saudi banks
> UPSTREAM: Offshore oil and gas projects to dominate Aramco capex in 2026
> DOWNSTREAM: Saudi downstream projects market enters lean period
> POWER: Wind power gathers pace in Saudi Arabia
> WATER: Sharakat plan signals next phase of Saudi water expansion
> CONSTRUCTION: Saudi construction enters a period of strategic readjustment
> TRANSPORT: Rail expansion powers Saudi Arabia’s infrastructure push