ACWA Power has signed a Power Purchase Agreement with the Saudi Power Procurement Company for the Rabigh 2 Independent Power Plant Expansion Project. Formalised on April 16, 2026, the agreement carries a total contract value of approximately SAR 11.5 billion — roughly three billion US dollars — making it one of the most significant individual energy contracts announced in the Kingdom in recent years.
The project centres on the construction of a gas-fired combined cycle power plant in the Makkah Region, with a total generation capacity of 2,313.5 megawatts. Notably, the facility has been designed with built-in readiness for the future installation of carbon capture systems, signalling a deliberate alignment with Saudi Arabia’s long-term energy sustainability goals and its broader commitment to reducing emissions over time.
Scope and Structure of the Agreement
Under the terms of the deal, ACWA Power will hold a 40% equity stake in the project, taking on full responsibility across the development lifecycle — from financing and construction through to long-term ownership and operations. The project also encompasses the development and expansion of a 380 kV electrical substation, a component that will directly improve grid integration and reinforce the reliability of electricity supply across the Makkah Region.
The Makkah Region is among the highest electricity-consuming areas in Saudi Arabia, with demand peaking substantially during the Hajj season when millions of pilgrims converge on the holy sites. The added generation capacity from the Rabigh 2 expansion is expected to bolster supply resilience during these critical periods and support the region’s steady population and infrastructure growth.
A Strategic Milestone for Saudi Arabia’s Energy Sector
Omar Al Hassan, Country General Manager for ACWA Power in Saudi Arabia, described the agreement as a meaningful step in the company’s ongoing contribution to the Kingdom’s infrastructure agenda. He stated that the Rabigh 2 expansion directly advances the goal of increasing generation capacity and improving supply reliability in a strategically vital part of the country.
Khaled Al Medbel, Vice President for Regional Business Development in KSA and the Middle East, highlighted the depth of the partnership between ACWA Power and the Saudi Power Procurement Company. He noted that the deal reflects sustained confidence in the Kingdom’s energy market and underscores ACWA Power’s long-term commitment to delivering solutions that serve national priorities.
Aligned with Vision 2030
The Rabigh 2 Independent Power Plant Expansion is closely aligned with the objectives of Saudi Vision 2030, which calls for a diversified economy, modernised infrastructure, and a more sustainable energy landscape. The project joins a growing pipeline of large-scale power developments being advanced across the Kingdom as demand continues to rise and grid infrastructure evolves to support both economic growth and the energy transition ahead.
