By: AGBI

Saudi Energy and Acwa Power have signed a power purchase agreement with the state-run, state-owned Saudi Power Procurement Company (SPPC) to expand a power plant in Mecca.

The deal includes developing, financing, building, owning and operating the 2.3 gigawatt Rabigh 2 independent power plant (IPP) expansion project, along with an extension of a 380kV electrical substation at the cost of SAR11.5 billion. ($3.1 billion), the companies said in separate statements to the Saudi stock exchange.

The project will be ready to add carbon capture units, but no details were provided.

The power purchase agreement will run for 31 years.

SPPC is the principal offtaker of electricity in the kingdom, for a 31-year term from the start of commercial operations.

No timeline for the project’s start and completion was disclosed.

Acwa and Saudi Energy each own 40 percent of the project company.

Shares of Acwa Power rose 1.3 percent to close at SAR178.30 on Sunday. The stock is down nearly 2 percent so far this year.

Saudi Energy shares closed almost 3 percent at SAR17.12 on Sunday, up 22 percent year to date.

The Public Investment Fund owns 74.31 percent of Saudi Energy and 44 percent of Acwa Power.