Acwa Power in $2.3 billion Egyptian gas-fired plant deal

Saudi utilities developer Acwa Power signed a power purchase agreement for a 2,300 Megawatt gas-fired combined cycle power project worth $2.3 billion (Dh8.44bn) with the Egyptian Electricity Transmission Company.

The project based in Luxor in southern Egypt is expected to start the first phase of operation in the summer of 2022 with full commercial operation set to commence in 2023, Acwa said in a statement.

The project has been engineered on the basis of a build-own-operate framework over a period of 25 years and would be critical to meeting Egypt’s growing demand.

Acwa would complete “the financing arrangements and commence construction of the power plant” to contribute to the power needs of the state, said Paddy Padmanathan, president and chief executive at Acwa.

Egypt, the Arab world’s most populous nation, is faced with rapidly growing demand for both industrial and residential power use. The country meets more than half of its power needs from gas at 53 per cent, with oil accounting for 43 per cent of its requirements.

The North African country has prioritised development of gas-fired power plants to tap into increasing supply of the resource from new discoveries offshore in the Mediterranean, such as the Zohr field development.

Acwa, a leading developer of renewable projects in the Middle East and North Africa, is 25 per cent owned by the Public Investment Fund, the kingdom’s sovereign wealth fund. The company is partnering with Egyptian contracting group Hassan Allam to develop the project.

Other projects in the pipeline for the utilities developer are a 200MW solar photovoltaic project in Kom Ombo in Aswan, Upper Egypt as well as a pipeline of 500MW of wind projects.

The company also has three other solar PV projects still under construction in Benban with a total installed capacity of 165.5MW through Egypt’s second feed-in-tariff programme.