A consortium of Abu Dhabi National Energy Company (Taqa) and Qatar Electricity and Water Company (QEWC) has put in the lowest bid for the Rabigh 2 independent power project (IPP) in Saudi Arabia.

Five bids were received for the project, with Taqa and QEWC offering the lowest bid to build the 1,700MW plant of 7.42 hals a kilowatt hour (hals/kWh). The local Acwa Power with the Mena Infrastructure Fund and Samsung C&T was the second-highest bidder at 8.81 hals/kWh.

The other bidders for the project were the UK/French IP-GDF Suez, Japan’s Marubeni and Korea Electric Power Company (Kepco). Bids were opened on 22 October.

Sources close to the scheme say that bidders appear to have been able to get financing for a 25-year tenor, matching the power purchase agreement (PPA) offered by Saudi Electricity Company, the government agency that will buy the power from the plant. It is the first time that a PPA of this duration has been used in Saudi Arabia and some banks had initially expressed reservations about agreeing to a long-term financing.

Construction of the plant and associated facilities is scheduled to begin no later than 31 March 2013, with a projected commercial operation date of 1 April 2017.