The Saudi Electricity Company (SEC) has signed a memorandum of understanding (MoU) with Japan Bank for International Cooperation (JBIC) to finance the company's current and future projects in Saudi Arabia’s energy sector.

The two sides plan to hold regular discussions, exchange and share information and develop solutions that tackle the challenges that SEC faces.

Fahad al-Sudairi, the CEO of SEC, said that the two sides are working on launching several initiatives to develop a smart infrastructure based on smart electricity transmission networks and automating distribution networks and smart meters, as all these initiatives will increase the reliability and efficiency of the service and contribute positively to environmental and social sustainability.

Electricity restructuring

SEC’s finances received a boost in November when it and the kingdom’s finance ministry agreed to convert the SR167.92bn ($44.78bn) owed by the state utility to the government into an Islamic bond.

The measure is part of restructuring the kingdom’s electricity sector and efforts to reclassify SEC’s financial government liabilities.

In a filing with the Saudi Stock Exchange (Tadawul) on 16 November, SEC said that it agreed to “re-reclassify SEC’s net government liabilities in the amount of SR167.92bn into a subordinated perpetual financial equity-like instrument with a redemption option and a profit rate of 4.5 per cent per annum”.