State-owned utility Saudi Electricity Company (SEC) has appointed banks to lead a sukuk issue of up to SR7bn ($1.9bn), that is expected to be launched in May.

The deal will be lead by the local Samba Capital, and the UK’s HSBC. Proceeds will be used to fund SEC’s expansion plans.

The company’s chief executive Ali Saleh al-Barrak told Reuters on 11 April that the company was planning a sukuk issue with a minimum size of SR5bn.

The deal will be SEC’s third locally targeted sukuk issue after it raised SR7bn in 2009 and also in 2007.

The deal follows other Saudi issuers this year, including Banque Saudi Fransi which raised $650m from an international bond issue in late March, and real estate developer Dar al-Arkan’s $450m sukuk issue in mid-February.