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Saudi Arabia's Rabigh 2 gas power expansion secures $2.58 billion financing

Saudi Arabia's Rabigh 2 gas power expansion secures $2.58 billion financing

Built World
October 5th, 2026: Saudi Energy and ACWA Power announce Rabigh 2 financing

Overview

Updated Oct 14

Saudi Arabia closed financing on October 1 for the Rabigh 2 power expansion, a 2,313.5-megawatt gas-fired plant in the kingdom's western province. A $2.2 billion construction contract was signed on October 13 with an Egyptian-Chinese joint venture, and construction is already more than 39% complete.

The structure ties private capital to the national grid: developers raise long-term debt against a state-backed power purchase agreement, while the Public Investment Fund anchors the project through its stake in ACWA Power. Saudi Energy and ACWA Power each hold 40 percent of the project vehicle, Al-Morjan Two Electricity Company. Operations begin in the second quarter of 2029, and the plant is built to accept carbon capture later.

Why it matters

Adds 2.3 gigawatts to Saudi Arabia's grid and locks in gas generation for decades as the kingdom targets 50 percent renewable power by 2030.

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Key Indicators

$2.58 billion
Debt financing secured
SAR 9.69 billion raised from 14 lenders for the Rabigh 2 expansion.
$2.2 billion
EPC contract value
Signed Oct 13 with Elsewedy Electric and Sinohydro joint venture.
39%
Construction progress
Reported by Elsewedy Electric; includes field work, engineering, and procurement.

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Organizations Involved

SE
Saudi Energy Company
National electric utility and project developer
Holds 40% stake in the Rabigh 2 expansion

Saudi Arabia's national electricity utility, co-developer and 40 percent owner of the project.
ACWA Power
ACWA Power
Saudi developer and operator of power and water assets
Holds 40% stake in Rabigh 2 expansion, co-developer

Saudi Arabia's largest private utility developer, 44 percent owned by the Public Investment Fund.
MT
Al-Morjan Two Electricity Company
Project company (special purpose vehicle)
Owner and operator of the Rabigh 2 expansion

The project vehicle set up to build, own and operate the Rabigh 2 expansion.
SP
Saudi Power Procurement Company
State power buyer
Offtaker under the project's long-term power purchase agreement

The state entity that buys electricity from Saudi power plants under long-term purchase agreements.

Timeline

April 2026 October 2026

3 events Latest: October 5th, 2026 · 1 month ago

  1. Saudi Energy and ACWA Power announce Rabigh 2 financing

    Latest Announcement

    The companies announce financial close of the 2,313.5 MW combined-cycle expansion, with operations expected from the second quarter of 2029.

  2. Rabigh 2 expansion reaches financial close

    Financing

    Al-Morjan Two Electricity Company secures SAR 9.69 billion in debt from 14 lenders; funding is obtained on this date.

  3. ACWA Power signs Rabigh 2 expansion contract

    Contract

    ACWA Power agrees to expand the gas-fired Rabigh 2 facility in a contract worth almost SAR 12 billion.

Scenarios

1

Rabigh 2 expansion starts operations in Q2 2029

Likely Resolves by Q3 2029

Discussed by: Saudi Energy and ACWA Power official filings; Financely project finance analysis

Construction of the combined-cycle plant proceeds without major delays. The new units integrate with the existing Rabigh 2 facility and begin supplying the grid under the long-term power purchase agreement with Saudi Power Procurement Company. The financial contribution appears in company results from the second quarter of 2029.

2

Construction delays push Rabigh 2 into 2030

Possible Resolves by Q3 2029

Discussed by: Project finance commentary on construction risk (Financely, MEED)

Equipment delivery, grid interconnection, or integration with the existing plant's control systems slips. Commissioning moves past the second quarter of 2029, delaying the expected revenue contribution from the expansion.

3

Carbon capture unit moves forward at Rabigh 2

Uncertain Resolves by End of 2031

Discussed by: Saudi Arabia's net-zero by 2060 target (Khaleej Business Insight)

The plant is designed to accept a carbon capture unit. If the kingdom advances carbon capture at scale to support its net-zero goal, developers sign a contract to build the unit, cutting the plant's emissions during operation.

4

Regional conflict disrupts construction

Unlikely Resolves by May 1, 2029

Discussed by: Engineering News-Record reporting on recent attacks

Escalating attacks on Saudi infrastructure raise delivery risk, but no disruption has been reported at the Rabigh site, which sits outside the Persian Gulf and Strait of Hormuz.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

January-June 2019

Dumat Al Jandal wind farm (2019)

Saudi Arabia awarded its first wind project, a 400 MW farm in the north, to a consortium led by EDF Renewables and Masdar. The group reached financial close in 2019 under a power purchase agreement with the state buyer.

Then

The project began supplying the grid in 2021, confirming the independent power producer template worked for wind.

Now

It established the pattern of private developers and international lenders financing Saudi power, later applied to gas assets.

Why this matters now

Rabigh 2 uses the same structure: private capital, a long-term power purchase agreement, and lenders underwriting decades of revenue.

2018-2019

Sakaka solar plant (2018-2019)

Saudi Arabia's first utility-scale solar plant, 300 MW, built by ACWA Power and partners in the north of the kingdom. It reached financial close in early 2018 and connected to the grid in late 2019.

Then

Sakaka showed ACWA Power could deliver commissioned renewable capacity on time.

Now

It anchored ACWA Power's role as Saudi Arabia's main private utility developer, a position now extended to gas with Rabigh 2.

Why this matters now

The same developer, ACWA Power, is now applying the project finance model to a much larger gas plant built for future carbon capture.

Sources

(13)
+7
Saudi Energy Company Construction Review ZAWYA MEED Saudi Exchange filing via FinancialFilings Maaal Financely VoltCal Khaleej Business Insight ad-hoc-news Engineering News-Record Business Insider Africa EPCIntel