SEC to tender IPP worth $10bn over next two years

Utility company expects $80bn investment over the next 10 years - exec

SEC to award four IPPs worth $10bn within next two years. Photo: Getty Images.
SEC to award four IPPs worth $10bn within next two years. Photo: Getty Images.

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Saudi Electricity Company, the Kingdom’s biggest power producer, planned to tender four independent power projects, worth approximately $10bn, within the next two years, the company’s top executive said.

Ali Saleh Al Barrak told a conference in Riyadh that SEC currently has two large IPP projects under construction. He added that there was a third project that was in the final stages of financial close, with six international companies bidding on the project. He did not provide further details.

These latest tenders come on the back of Saudi Arabia experiencing a major demand-supply gap as it struggles to provide an uninterrupted electricity supply in the midst of a population and industrial boom.

Over the next 10 years, SEC is expected to invest some $80bn to add an additional 20,000MW of power generation capacity, Dow Jones reported.

Al Barrak added that the utility was currently in the documentation stage of a potential conventional or Islamic bond. He said the company expected to tap the market either in 2011 or early 2012, depending on liquidity requirements.

In April of this year, SEC awarded two contracts to Alfanar worth a combined SAR1.9bn ($506.6m). The contracts are for a power plant and the Haramain high-speed rail project.

Back in January, Al Barrak said that the company had executed projects worth $23.9bn in 2010. In the same year, SEC raised $1.9bn through a seven year Islamic bond, or sukuk.

Prior to that last sukuk, the company had issued a five year, $1.8bn sukuk in 2009, while 2007 saw a five year $1.3bn issue.

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