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Saudi Arabia’s Acwa Power and Kuwait-based financial institution Gulf Investment Corporation (GIC) have signed a letter of agreement to develop the Al-Zour North 2 & 3 independent water and power project (IWPP) in southern Kuwait.

The project is set to be the largest IWPP plant in Kuwait, with a net power generation capacity of at least 2,700MW and a net desalinated water production capacity of at least 120 million imperial gallons a day.

The partners will investment more than $4bn in developing the Al-Zour North 2 & 3 IWPP, which will support Kuwait’s electricity generation and water security infrastructure.

The Acwa Power and GIC consortium have signed a letter of agreement with the Kuwait Authority for Partnership Projects Authority (Kapp) and the country’s Ministry of Electricity, Water & Renewable Energy. Under a 25-year offtake agreement, the Acwa Power-led consortium will design, finance, build, operate, maintain and transfer the plant and its associated facilities under a build, operate and transfer model.

The consortium and Kapp will establish a project company in which the former will a hold 40% stake and Kapp will retain the other 60% share capital. Kapp will then allocate 50% of the company’s capital for public subscription by Kuwaiti citizens after the project becomes fully operational by 2029 and is listed on the Kuwait Stock Exchange.

Ibrahim Ali Al-Qadhi, CEO of GIC, said: “This project represents a landmark investment in GIC portfolio, utilising the latest technologies and highest global standards in power generation and water desalination.”

Raad Al-Saady, managing director and vice chairman of Acwa Power, said: “We look forward to bringing our experience from a diverse portfolio of projects worldwide and applying our expertise in the build-operate-transfer model in close partnership with our counterparts in Kuwait.

“Together, we will work to enhance the reliable and sustainable delivery of power and water in Kuwait, further strengthening our shared efforts towards energy transition and water security,” Al-Saady said.