State-controlled utility provider Saudi Electricity Company (SEC) has said it is opening up new investment opportunities for the private sector to add an estimated 5,400MW of generation capacity in the kingdom.

“The option will be implemented in phases,” the company said in a statement to the Saudi Stock Exchange (Tadawul), where its shares are traded.

SEC’s executive committee has already given a nod to the scheme for private investment, the firm said in the statement without giving further details.

Saudi Arabia is trying to diversify its hydrocarbons-based economy. The kingdom, which relies heavily on sale of oil for revenues, intends to wean its economy off oil by 2020. Its economic reform plans, announced earlier in June, puts emphasis on the part-privatisation of the state assets. It also encourages private sector participation through public-private partnership (PPP) deals, in which private companies would be able to fund projects and then operate them to generate income.

Riyadh now has a major tilt towards the private developer model for major utility projects as it needs to procure 47GW of generation capacity by 2024.

In August, MEED reported that SEC was considering switching the procurement model for the planned 1,300MW second phase of the Jeddah South power plant to an IPP, after having originally tendered the project as an engineering, procurement and construction (EPC) contract. It is also understood that SEC will switch the 3,780MW Taiba integrated solar combined-cycle (ISCC) plant to either an EPC-plus finance or IPP model.

Moreover, the state electricity company is also preparing to tender its next major power project, the 5.4GW PP15 plant, as an IPP before the end of 2016.