Acwa Power starts output at two $3.5bn Saudi gas plants

Summary

• Acwa Power began initial electricity generation at the Taiba 1 and Qassim 1 gas plants.
• The two projects carry SAR13 billion of investment and 3.8GW of combined capacity when complete.
• First power arrives more than a year after Acwa's original target of mid-2025.

The latest

Initial electricity output has started at two gas-fired plants under construction in Saudi Arabia, Taiba 1 in Medina and Qassim 1 in the centre of the kingdom, Acwa Power said in a statement to the Saudi stock exchange. The two projects represent more than SAR13 billion, or $3.5 billion, of investment. Combined capacity will reach about 3.8 gigawatts once both are fully operational.

Details

• The projects: Taiba 1 sits in Medina and Qassim 1 in central Saudi Arabia, with initial production now under way at both sites, according to Acwa Power. The developer said the two plants together represent more than SAR13 billion of investment and around 3.8GW of capacity when running at full output.
• The timeline: Both plants are scheduled for completion in 2027, Acwa Power said. That is a substantial slip from the company's earlier guidance, which had put full operations in the second quarter of 2025 — leaving first power arriving more than a year behind the original plan.
• Hydrogen design: The two plants are built to run on a blend of natural gas with up to 50 percent hydrogen, according to the company. The design leaves room to cut the carbon intensity of the output later without replacing the generating units themselves.
• Ownership structure: Acwa Power holds a 40 percent stake in each of the two special-purpose vehicles behind the projects: Sidra One for Electricity Company and Qudra One for Electricity Company. Other investors include Saudi Energy, formerly Saudi Electricity, and Haji Abdullah Alireza & Company.
• The earnings backdrop: Acwa Power reported last month that net profit fell 36 percent year on year to SAR308 million in the second quarter of 2026. The company attributed the drop to the US-Iran war, which it said slowed project development across the GCC.
• Pipeline additions: Despite what it described as geopolitical uncertainty, the company said it added 5.2GW of power generation capacity and 0.6 million cubic metres per day of desalination capacity to its development pipeline over the period.
• The wider book: Acwa Power now has 32 projects under development, accounting for 47GW of generation capacity and 2 million cubic metres per day of water desalination capacity, according to the company's own figures.
• The market reaction: Shares were trading 2 percent higher on Thursday morning, but remain down more than 6 percent so far this year. The sovereign Public Investment Fund owns 44.1 percent of the company.

Background

Acwa Power is Saudi Arabia's main vehicle for large-scale power and desalination development, with the Public Investment Fund as its largest shareholder. Its portfolio spans renewables and gas-fired generation, and the company reports project milestones to the Saudi stock exchange as a listed developer.

Between the lines

The gap between a mid-2025 target and a 2027 completion date sits alongside the company's own explanation for weaker earnings — regional conflict slowing development work across the GCC. Yet the pipeline grew by 5.2GW in the same quarter profit fell 36 percent, which points to delayed delivery rather than shrinking demand. The hydrogen-blend design suggests the plants are built for a longer fuel transition than their gas-fired classification implies.

What's next

Watch for the completion of both plants in 2027, any revised commissioning dates disclosed to the Saudi exchange, and Acwa Power's next quarterly results for whether the profit decline it linked to regional conflict continues.

Source: AGBI (Pramod Kumar)