Tri-generation is one of the most efficient ways for maximizing the utilization of available energy. Utilization of waste heat (flue gases) liberated by the Al-Hamra gas turbine power plant is analyzed in this research work for simultaneous production of: (a) electricity by combining steam rankine cycle using heat recovery steam generator (HRSG); (b) clean water by air gap membrane distillation (AGMD) plant; and (c) cooling by single stage vapor absorption chiller (VAC). The flue gases liberated from the gas turbine power cycle is the prime source of energy for the tri-generation system. The heat recovered from condenser of steam cycle and excess heat available at the flue gases are utilized to drive cooling and desalination cycles which are optimized based on the cooling energy demands of the villas. Economic and environmental benefits of the tri-generation system in terms of cost savings and reduction in carbon emissions were analyzed. Energy efficiency of about 82%–85% is achieved by the tri-generation system compared to 50%–52% for combined cycles. Normalized carbon dioxide emission per MW·h is reduced by 51.5% by implementation of waste heat recovery tri-generation system. The tri-generation system has a payback period of 1.38 years with cumulative net present value of $66 million over the project life time.