A consortium between Elsewedy Electric for Power System Projects and China's Sinohydro has signed an EPC (Engineering, Procurement, and Construction) contract worth USD 2.2 bn to expand the 2.3 GW Rabigh 2 independent power plant on the Red Sea coast in Saudi Arabia, according to a press release (PDF). The parties signed the contract in Riyadh on Monday, 12 October, though the statement did not specify the scope of work for each party in the consortium.
The consortium is executing the plant on a turnkey basis for Al Marjan 2 Electricity Company, which is implementing the project, whose ownership structure includes both ACWA Power and the Saudi Electricity Company (formerly the Saudi Electric Company) with a 40% stake each. The contract encompasses all phases from design to operation and testing, in addition to civil works and grid connection. The combined-cycle gas turbine plant will operate with six gas turbines and two steam turbines from Siemens, and the plant is designed to accommodate a carbon capture unit at a later stage.
The consortium has already commenced execution: More than 39% of the works have been completed. Elsewedy Electric for Power System Projects stated that the consortium between it and the PowerChina group subsidiary is operating on-site pursuant to a previously issued limited notice to proceed, with the contract signing marking the beginning of full execution for the combined-cycle power plant. Commercial operation of the plant is scheduled to begin in May 2029, and the Saudi Electricity Company expects the plant's impact to be reflected in its financial results starting from the second quarter of 2029.
Financing is secured: ACWA Power and the Saudi Electricity Company first secured offtakers by signing an SAR 11.5 bn power purchase agreement with the Saudi Power Procurement Company last April. This agreement extends for 31 years from the plant's commercial operation date, according to a disclosure sent by ACWA Power to the Saudi Stock Exchange (Tadawul). The project company subsequently achieved financial close on 1 October, securing financing worth SAR 9.69 bn (USD 2.58 bn) from 14 local, regional, and international lenders, to be repaid over approximately 34 years, according to a disclosure sent by the Saudi Electricity Company.
Remember—the Rabigh 2 project is an expansion of an existing 2.06 GW plant. The ACWA Power consortium had contracted to develop that plant in 2013, selling electricity under a power purchase agreement of up to 20 years since June 2017. As for Elsewedy Electric, it is no stranger to the area, as it is executing expansion works at the adjacent 1.2 GW Rabigh 1 plant for the Saudi Electricity Company in cooperation with Siemens Energy. The plant is slated to operate at full capacity next year.
