Utility plans to use more financing from private sector
Five independent power projects (IPP) worth a total of about $20bn should be completed in Saudi Arabia by 2019, according to Amer al-Swaha, head of the IPP programme at Saudi Electricity Company (SEC)
The state-owned firm is the largest utility in the Gulf.
Al-Swaha said the projects are expected to generate a total of 8.8GW of power. He was speaking at MEED’s Middle East Project Finance 2010 conference in Bahrain on 16 February.
The projects include the Riyadh PP11 and plants at Qurayyah, Dheba, Shuqaiq and Ras al-Zour.
The Riyadh PP11 plant will be developed with 50 per cent of its finance from private sector sources. The other plants will be developed using debt finance for 80 per cent of their costs.
“Power production lends itself to competition and IPPs will help avoid the mismatch between mid-term financing projects that pay back over long periods,” said Al-Swaha.
SEC expects its IPP programme to provide up to 30 per cent of its power generating capacity in the future.
The most recent SEC project was the $2.55bn Rabigh IPP which reached financial close in July 2009. It was the first power deal in the region to go ahead since the onset of the financial crisis.
SEC’s headquarters are in Riyadh and it is responsible for 85 per cent of total electricity generation in the kingdom.