Saudi Energy Company has finalized a $3.1 billion power purchase agreement with the Saudi Power Procurement Company to expand the Rabigh 2 Independent Power Producer project. The 2,313.5 megawatt facility in Makkah province will utilize high-efficiency gas technology and is designed to accommodate future carbon capture integration over a 31-year operational term.
Saudi Energy Company has entered into a $3.1 billion (SAR 11.5 billion) power purchase agreement with the Saudi Power Procurement Company (SPPC) for the expansion of the Rabigh 2 Independent Power Producer (IPP) facility. According to official disclosures to the Tadawul exchange, the project involves the development, financing, and operation of a combined cycle gas turbine (CCGT) plant in Makkah province with a generation capacity of 2,313.5 megawatts. SPPC serves as the Kingdom's principal agency for electricity procurement, while Saudi Energy Company, an infrastructure firm holding a 40% interest in the venture, collaborates with ACWA Power to deliver the asset.
This expansion is a pivotal advancement for the regional energy sector, addressing rising industrial and domestic demand through high-efficiency generation. A significant technical highlight is the plant’s readiness for future carbon capture integration, positioning the facility within the broader scope of Saudi Arabia’s environmental objectives. The scope of work also includes a substantial 380kV substation upgrade, which is essential for maintaining grid stability as massive new loads are introduced to the network.
The 31-year operational contract offers long-term financial certainty for investors, emphasizing the continued reliability of the independent power producer framework in the Middle East. For businesses in the energy supply chain, this project signifies a robust market for CCGT components and engineering services. Strategically, the integration of carbon-readiness into large-scale utility contracts suggests that future project tenders will increasingly prioritize technical adaptability. This development reinforces a shift toward utility projects that balance industrial scale with long-term decarbonization potential, providing a blueprint for future infrastructure investments in the region.
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