Saudi Arabia's SEC raises $3.56bn to finance growth and support Egypt electricity project

Saudi Electricity Company secured financing through two facilities

AbuDhabi, United Arab Emirates- Oct, 04, 2015: Visitora at the Saudi  Electricity Company stand during the Power-Gen Middle East exhibition at the  Abu Dhabi National Exhibition Centre in Abu Dhabi.   ( Satish Kumar / The National ) For Business *** Local Caption ***  SK-PowerGen-04102015-010.jpg
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Saudi Electricity Company, the kingdom’s main utility, has raised more than $3.56 billion in financing to support its long-term growth and the Saudi Arabia-Egypt electricity interconnection project, it said on Thursday.

SEC signed an agreement to obtain a US dollar-denominated $3bn international syndicated facility and a $567.5 million Export Credit Agency (ECA) facility, it said in statements to the Tadawul stock exchange, where its shares are traded.

Covering a five-year tenor, the $3bn unsecured facility will be obtained from 15 regional and international lenders. It will be used to refinance an existing syndicated facility that was raised in 2017 and is scheduled to mature this month.

The facility will also fund the company's capital expenditure needs aimed at achieving long-term growth for both the business and investors, SEC said.

The 15-bank syndicate includes Standard Chartered, HSBC, Intesa Sanpaolo, Mizuho Bank, MUFG Bank, Sumitomo Mitsui Banking Corporation, Industrial and Commercial Bank of China, State Bank of India, Bank of China, Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, First Abu Dhabi Bank and National Bank of Kuwait, among others.

Meanwhile, the ECA facility, covering a 14-year tenor, will be used to finance SEC's Saudi Arabia-Egypt electricity interconnection project.

Egypt, the Arab world’s most populous nation, and Saudi Arabia, the region's biggest economy, signed $1.8bn worth of contracts in Cairo in October to build transmission plants and connect power grids.

The project will have a peak transmission capacity of 3,000 megawatts and will be enacted by three consortia made up of international and regional companies, an Egyptian Cabinet statement said at the time.

Egypt is currently battling an energy crisis and on Wednesday, Egyptian Prime Minister Mostafa Madbouly said the country will introduce a new programme next week to reduce electricity consumption.

The new measures will include cutting off electricity in government buildings at the end of official working hours, stopping outdoor illumination of public squares and limiting lighting at large sports complexes. Directives will also be issued for shopping malls to set central air conditioning at temperatures of 25ºC or higher.

SEC signed the ECA agreement with Standard Chartered Bank and Sumitomo Mitsui Banking Corporation. Subject to satisfaction of conditions precedent, it will be guaranteed by the Swedish Export Credit Agency and funded by the Swedish Export Credit Corporation.

“SEC's obtainment of the international syndicated facility as well as the ECA facility, both achieved at favourable terms and pricing, is testament to the company's substantial asset base, high-quality credit and ties with the kingdom's sovereign credit rating,” state-run Saudi Press Agency quoted Khaled Al Gnoon, SEC’s chief executive, as saying.

“The increased interest from the regional and international banking community is also encouraging and speaks to Saudi Arabia's strong economic fundamentals, especially amid volatile market conditions,” he added.

Updated: August 11, 2022, 4:38 PM
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