Sources close to the SEC say capital market funding is being considered to ensure projects can go ahead on schedule to meet growing domestic power demand.
If approved, the move could herald the start of a wider plan to sell stakes in power projects on the Saudi stock market (Tadawul).
PP11 is expected to have a capacity of 1,800-2,100MW, although it is not yet clear how much it will cost to develop. The PP10 project, which will have a capacity of 2,000MW and is currently being constructed by the local Arabian Bemco, is expected to cost $3bn.
However, it is still uncertain if the plan to list power projects on the stock market will be approved by the Capital Market Authority (CMA). The stock market regulator has said it will not approve applications for any new IPOs while the stock market is performing so badly (MEED 28:11:08).
“Although there could be some IPOs from stakes in power projects held by SEC, the CMA is currently loath to allow new IPOs, and the only exception would be if they are par-value issues,” says one banker in the country.
Typically, companies that receive subsidised feedstock are required to sell their shares on the stock market at a nominal or par value, as part of the government’s scheme to create wealth among the general public.