Saudi Electricity gets $13bn govt loan
Riyadh, March 20, 2014
State-owned power utility Saudi Electricity Co has been granted an interest-free loan of 49.4 billion riyals ($13.2 billion) from the government to help fund its power generation projects, the company said on Thursday.
The company said the loan, granted by a royal decree that was received on Thursday, would be disbursed after talks with the finance ministry. It did not provide further details.
SEC head Ziyad Alshiha said on Tuesday, in a speech reported by state media, that his company planned to spend 622 billion riyals between now and 2023, adding 40,000 megawatts of installed generating capacity and expanding transmission and distribution networks.
He added that power usage in Saudi Arabia had risen by around 7 to 8 percent a year over the last decade and would continue to rise.
While growing rapidly on an annual basis, power demand fluctuates wildly throughout the year, with demand in the summer - when air conditioning is extensively used to combat the intense heat - much higher than in the cooler, winter months.
It is not the first time that the government has allocated a huge sum to SEC to help fund its expansion needs; in June 2011, Saudi Arabia's cabinet approved a 25-year, interest-free loan to the company of 51.1 billion riyals. - Reuters