ACWA Power International and partners including Samsung C&T Corp. won bidding to build a $2.6 billion power plant on Saudi Arabia’s Red Sea coast, the state news agency reported.
Saudi Electricity Co., the government-controlled distributor, awarded the contract to the ACWA-led group to build and operate the Rabigh II IPP, or independent power plant, Saudi Press Agency said today.
The facility will have capacity to produce 1,813 megawatts and is to start operating in the summer of 2016, SPA cited Saudi Electricity Chief Executive Officer Ali al-Barrak as saying. Financing arrangements for the deal are to be complete by the end of March, SPA reported.
Saudi Arabia and other Persian Gulf oil producers are boosting power production to meet growing demand from domestic industries and expanding populations. They mainly seek private investors to build and run plants under long-term agreements to sell electricity to state-run utilities.
Abu Dhabi National Energy Co. and partners Samsung Engineering Co. and Qatar Electricity & Water Co. also bid for the project. The group’s initial offer in October included the lowest rate at which potential builders pledged to sell power to Saudi Electricity.
Taqa, as the Abu Dhabi utility is known, said today it lost out in the bidding after Saudi Electricity sought revised offers for a power station with less generating capacity than the Taqa-led group originally planned. Taqa said it would seek to help meet Saudi Arabia’s power needs in the future.