Elsewedy JV signs a USD 2.2 bn EPC contract for Saudi Arabia’s Rabigh 2 expansion

A joint venture between Elsewedy Electric’s power systems arm and PowerChina’s Sinohydro signed a USD 2.2 bn EPC contract to build the 2.3 GW Rabigh 2 Independent Power Plant (IPP) expansion on Saudi Arabia’s Red Sea coast, according to a press release (pdf). The two signed the contract in Riyadh on Monday but haven’t said how they’re splitting the work.

The JV is delivering the plant turnkey for Al Mourjan Two for Electricity, the project company of which Acwa and Saudi Energy (formerly Saudi Electricity Co.) each hold 40%. That covers everything from design to commissioning and testing, plus the civil works and the grid connection. The gas-fired combined-cycle plant will run on six Siemens gas turbines and two steam turbines, and it’s built to take a carbon capture unit later.

Already under way: Work is more than 39% complete. The JV has been on site under a limited notice to proceed, Elsewedy says, and the signing marks the start of full-scale construction. Commercial operations are slated for May 2029, and Saudi Energy expects the plant to show up in its numbers from 2Q 2029.

The money is in place: Acwa and Saudi Energy locked in their buyer first, signing a SAR 11.5 bn power purchase agreement with the Saudi Power Procurement Company in April. That agreement covers 31 years from the plant’s commercial operation date, according to Acwa’s disclosure to Tadawul. The project company then reached financial close on 1 October, with SAR 9.69 bn (USD 2.58 bn) in debt from 14 local, regional, and international lenders, repayable over roughly 34 years, according to a Saudi Energy filing.

Rabigh 2 expands an existing 2.06 GW plant that Acwa’s consortium signed for in 2013, which has sold power under a PPA of up to 20 years since June 2017. Elsewedy knows the neighborhood too: next door, it’s building the 1.2 GW Rabigh 1 expansion for Saudi Energy with Siemens Energy, due to reach full operation next year.