ACWA Power, widely known as the world’s largest private water desalination company and a major player in the global energy transition, has signed a Power Purchase Agreement (PPA) with the Saudi Power Procurement Company for the Rabigh 2 Independent Power Plant Expansion Project. The agreement was signed on April 16, 2026, with a total contract value of about SAR 11.5 billion.
It covers the development of a large gas-fired combined cycle power plant located in the Makkah Region of Saudi Arabia. The project will have a total generation capacity of 2,313.5 megawatts and is designed with future readiness for the possible installation of a carbon capture system, reflecting a focus on reducing emissions over time.
The Rabigh 2 expansion is one of the major infrastructure projects in the Kingdom’s power sector. It includes the full development cycle of the plant—from financing and construction to ownership and long-term operation. In addition to the power plant, the project also involves the development and expansion of a 380 kV substation. This will help improve grid integration and strengthen the stability and reliability of the electricity network in the region.
Omar Al Hassan, Country General Manager for ACWA Power in Saudi Arabia, described the agreement as an important milestone for the company. He stated that the project reinforces ACWA Power’s commitment to supporting the continued expansion of the Kingdom’s electricity infrastructure. According to him, the Rabigh 2 expansion will help increase generation capacity, improve supply reliability, and support Saudi Arabia’s broader goals for its energy transition.
Khaled Al Medbel, Vice President for Regional Business Development in KSA and the Middle East, also commented on the agreement. He highlighted that the deal reflects the strong and ongoing partnership between ACWA Power and the Saudi Power Procurement Company. He added that it demonstrates continued confidence in the Saudi energy market and ACWA Power’s long-term commitment to delivering large-scale, strategic power solutions that contribute to the Kingdom’s economic growth and competitiveness.
ACWA Power will hold a 40% equity stake in the project, underlining its significant role in its development and operation. The project is closely aligned with the objectives of Saudi Vision 2030, which aims to diversify the economy, modernize infrastructure, and strengthen the sustainability of the energy sector. Overall, the Rabigh 2 Independent Power Plant Expansion Project represents a major step in expanding Saudi Arabia’s electricity generation capacity while also preparing for a more sustainable energy future through cleaner technologies and improved grid infrastructure.
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