The contract was signed with a consortium led by ACWA Power International, comprising Samsung C&T and MENA Fund.

The agreement was signed by SEC President Ali Al-Barrak with other signatories in the presence of Water and Electricity Minister Abdullah Al-Hussayen.

The project will deliver 3,927MW to SEC under a 20-year power purchase agreement starting June 30, 2014.

Al-Hussayen said the project is being developed by SEC to cater to the increasing demand for power, adding it represents a milestone in the Saudi power sector. "We need to cater to the growing demand for power," the minister said, citing a four percent increase in demand this summer from the existing eight percent.

He also said the Kingdom is planning to spend SR300 billion over the next 10 years for transmission and distribution of electricity and also to restructure existing facilities.

During the past five years, the government has given SR65 billion in loans to SEC to develop its facilities in the Kingdom, the minister added.

Al-Barrak said the project, dubbed "Hajr for Electricity Production Company," has been established with the winning consortium and SEC owning equal stakes of 50 percent each.

It is the largest gas-fired power project in the world and will use the latest technology to increase efficiency of fuel utilization and maximize operational flexibility, he said.

The project is to be developed on a build, own, operate basis, within 33 months, and will be located at Qurayyah, on the eastern coast, adjacent to existing SEC facilities. It will substantially increase power supplies to the local power grid.

The winning consortium selected Siemens of Germany to provide all major equipment and electrical systems, and Samsung C&T of Korea to engineer, procure and construct the project as the EPC contractor to deliver the project.

On completion, the plant will be operated by The First National Operation & Maintenance Company, a subsidiary of ACWA Power, under a long-term operation and maintenance contract, with Siemens providing parts and services for the gas turbines under a long-term service agreement with NOMAC. All relevant project agreements were signed Wednesday.

The international banks providing funds are HSBC, KfW, Standard Chartered and SMBC. Local banks funding the project are Banque Saudi Fransi, National Commercial Bank, Samba and SABB.