The Saudi-Kuwaiti consortium of ACWA Power and Gulf Investment Corporation has signed a 25-year Energy Conversion Agreement (ECA) and Water Purchase Agreement (WPA) worth $4.1 billion with Kuwait’s Ministry of Electricity, Water and Renewable Energy for the Az-Zour North Phase 2 and 3 Independent Water and Power Project (IWPP).

The project will be developed under a build-operate-transfer (BOT) model through a 25-year energy conversion and water purchase agreement that will commence from the commercial operation date, ACWA Power said in a statement to the Saudi stock exchange.

The Ministry will be the principal off taker of the project’s full electricity and water output for the duration of the agreement, it said. Az-Zour North Phase 2 and 3 IWPP will provide a net power generation capacity of 2,700 megawatts (MW) and net desalination capacity of 545,500 cubic metres per day (m3/day).

ACWA Power owns 24 percent stake in the project, the statement said.

The new agreement is expected to replace the previous 25-year power and water purchase agreement (PWPA) signed in August 2025 by the consortium with the Ministry and Kuwait Authority for Partnership Projects (KAPP). 

Under an ECA, the purchaser of the electricity bears the fuel procurement and supply risk with the generator’s revenues tied to operating performance. In a Power Purchase Agreement (PPA), the fuel risk is borne by the generator with the buyer only paying for the electricity output.

In January 2026, Saudi Electricity Company (SEC) had signed an ECA with the state-backed Saudi Power Procurement Company (SPCC) for the purchase of electricity produced from the 1,179 MW Rabigh 1 expansion power plant in Saudi Arabia’s Western Province.

(Editing by Anoop Menon) (anoop.menon@lseg.com)

Subscribe to our Projects' PULSE newsletter that brings you trustworthy news, updates and insights on project activities, developments, and partnerships across sectors in the Middle East and Africa.