Riyadh-based Acwa Power signed a power purchase agreement with the Egyptian government to operate a 200-megawatt solar photovoltaic plant in the country.
Under the terms of the agreement, the Saudi company will develop, finance, construct and operate the Kom Ombo plant.
Construction is set for completion during the first quarter of 2021, the company said.
"We commenced our operations in Egypt through the launch of the Benban PV IPP [independent power producer] project, and we are currently in discussions with the Egyptian Ministry of Electricity to finalise agreements for the 2250 MW Dairut CCGT [combined cycle gas turbines], with an investment value of $2.3 billion (Dh8.44bn)," said Acwa Power chief investment officer Rajit Nanda.
"Today, through the deployment of the Kom Ombo Plant, we are further branching our commendable trail in Egypt," he added.
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 government is prioritising adding renewables to the mix, with plans to raise capacity from clean sources to 20 per cent by 2020.
The new solar plant is expected to meet the needs of 130,000 households, Acwa Power added.
Meanwhile, the company is close to reaching an $11.5bn gasification project being developed with Saudi Aramco and Air Products by the close of the year, chief executive Paddy Padmanathan told The National in an interview earlier this month.
Acwa Power will have a 25 per cent stake in the scheme, which is expected to produce steam, hydrogen, oxygen and a small amount of desalinated water, all for local consumption and use at the nearby Jazan refinery. Air Products will hold a 55 per cent stake, with the remaining interest held by state oil producer Saudi Aramco.
Earlier this week, Acwa Power won bids to develop two solar schemes in Ethiopia with a total capacity of 250MW, marking its entry in the African country.