Saudi Electricity Company announces signing a US$3 billion international syndicated facility agreement

On Tuesday, October 24^th, 2023, the Saudi Electricity Company (SEC) announced signing a US$3 billion (equivalent to 11.25 billion Saudi riyals) international syndicated facility agreement with four leading banks in the region. This landmark signing took place amid the proceedings of the prominent global economic event, the Future Investment Initiative, held in Riyadh.

The financing agreement has a tenure of five years and requires no guarantees from SEC. Participating banks include Dubai Islamic Bank PJSC, Kuwait Finance House, Mashreq Bank PSC, and Saudi National Bank.

Engineer Khaled Al-Gnoon, CEO of SEC, stated, “The financing comes in line with our ambitious investment strategy aimed at injecting approximately SAR 500 bn in our expansion plans in the electricity sector and CapEx spend by 2030 to provide exceptional electricity services to subscribers, this as well as boosting the growth of the company’s regulated asset base, a move anticipated to fortify its financial position and prospects for revenue growth.

 ”Al-Gnoon added, “Our investments primarily focus on building smart grids, integrating renewable energy projects, and improving the gird reliability, altogether will provide the essential infrastructure for the transmission and distribution grids to further boost electricity generation efficiency levels and achieve optimal electricity production, in line with the goals of Vision 2030. Furthermore, these investments translate into a myriad of environmental and societal co-benefits, affirming the designation of many of these investments as green and eco-friendly ventures.”

He added, “Our objective is to create a diversified portfolio, encompassing continuing to invest in energy production and progress in the liquid displacement program, in alignment with the Kingdom’s ambitious energy transition plans. We continue to further leverage the company’s mutli-decade expertise in the electricity sector and its substantial asset base to unlock additional growth opportunities from new business segments, such as fiber optics telecom and ICT services, energy services and solutions, and the provision of the necessary infrastructure for electric vehicles, among others.”

Engineer Al-Gnoon emphasized, “The company’s robust financial profile and well-balanced capital structure, supported by favourable regulatory and financial reforms implemented in the electricity sector, optimally position it to successfully fund future growth plans and enhance returns for its shareholders.”

Al-Gnoon concluded, “We are pleased with the significant interest from leading banks in the region to partner with SEC and to successfully close this financing deal with favourable terms and pricing. This underscores the company’s strong credit profile and strengthens the continued collaboration between SEC and its financing partners.”