Saudi Electricity Company plans to add 30GW of capacity

13 June 2024

Riyadh-headquartered utility Saudi Electricity Company (SEC) is understood to be looking at developing approximately 30,000MW of gas-fired capacity within and outside Saudi Arabia. 

SEC in 2022 completed divesting its full interest in the principal buyer, Saudi Power Procurement Company (SPPC), which has enabled it to bid for contracts to develop and operate power generation plants, in addition to operating the kingdom's power transmission and distribution network.

Related read: Saudi energy restructuring gains momentum 

According to industry sources, SEC has booked in advance some 30GW of gas turbine capacity with the industry's leading original equipment manufacturers (OEMs) in anticipation of domestic and overseas demand for gas-fired generation power plants.

One of the sources said potential projects in Saudi Arabia will be developed through a bilateral agreement with SPPC and potentially in partnership with Saudi utility developer Acwa Power. 

MEED understands SEC and SPPC have appointed a financial adviser to support the development of these future projects.

A team comprising SEC and Acwa Power bid and won the contracts to develop and operate the Qassim 1 and Taiba 1 independent power projects last year. Each plant has a capacity of 1,800MW. The two projects are valued at SR14.6bn ($3.9bn).

A team that includes SEC is also expected to bid for the contracts to develop the Remah 1 and 2 and Nairiyah 1 and 2 gas-fired IPP projects being tendered by SPPC. 

Ratings upgrade

On 24 May, Fitch Ratings upgraded SEC's ratings from A to A+, aligning it to be on par with the national sovereign rating.

SEC said: "The upgrade recognises SEC’s stable financial profile which is secured by the conversion of SR168bn of SEC's liabilities into equity-like instruments, the company’s leverage headroom and strong cash flow visibility, and its crucial role in KSA's energy plans".

It added that the upgrade "was driven by….SEC’s robust decision-making, strong government support, and alignment with national policy".

"The government’s 81% ownership, strategic oversight and SEC's key role in Saudi Arabia's decarbonisation efforts underscore this support."

Notably, in April, the Japan Bank for International Cooperation (JBIC) signed a memorandum of understanding with SEC to strengthen their partnership.

JBIC said the MoU entails developing solutions to support SEC’s future projects through investments by Japanese companies, the introduction of Japanese products and technologies, and the provision of financial support.

Six-year capex

Last month, MEED reported that SEC was planning a SR472bn ($126bn) capital expenditure programme over the next six years to enhance the kingdom’s power generation, transmission and distribution infrastructure and to meet future demand growth.

The largest component of this spending drive is the transmission sector, with a planned investment requirement of SR351bn. A total of SR116bn is envisaged for the distribution sector.

A mere SR6.2bn is dedicated to power generation projects. This comparatively low amount is due to most new electricity production plants now tendered by SPPC under the kingdom’s public-private partnership (PPP) framework.

Related read: Saudi Arabia plans two new gas-fired power plants

 

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Jennifer Aguinaldo
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    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

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