International Finance

Saudi Electricity signs $2.4 bn financing agreement with 7 major banks

The seven banks include the National Commercial Bank, Bank Albilad and Al-Rajhi Bank

Saudi Electricity Company (SEC) has signed a $2.4 billion financing agreement with seven major banks in the region, the media reported.

The seven major banks that the Saudi Electricity Company signed an agreement with include the National Commercial Bank, Bank Albilad, Al-Rajhi Bank, Riyad Bank, Samba Financial Group, Banque Saudi Fransi and the Saudi British Bank.

The financing is a 7-year medium-term facility and is unsecured syndicated borrowing.
Fahad Al Sudairi, president and chief executive of SEC told the media, “SEC is a national utility, delivering electric services to a growing customer base of almost 9.8 million subscribers in Saudi Arabia. Our vigorous focus is to continue demonstrating operational efficiency improvement, achieve a quantum leap in promoting automation and digitization across our business and further enhance the customer service.”

“This successful financing comes as part of SEC’s plans to finance its general corporate purposes as well as finance its capital projects such as smart meters, grid reliability improvement and new interconnection projects. The financing will also lengthen the average maturity of our financing mix and is expected to reflect positively on reducing our weighted average cost of funding.”

Recent media reports revealed that the Saudi Electricity Company is implementing eight projects in Saudi Arabia’s Hail region with contracts worth more than $159 million.
The projects are in line to increase the electricity generating capacity of the kingdom and meet the growing demand.

Last month, the company announced a net loss of SR869 million for the second quarter of 2020, compared to a profit of SR789 million during the same period last year.

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