Monday, Jun 13, 2011
RIYADH (Zawya Dow Jones)--Saudi Electricity Co. (5110.SA), the kingdom's main power producer, will receive a 51.1 billion riyal ($13.6 billion) loan from its main shareholder, the Saudi government, to finance new projects, the official news agency reported Monday.
The lifeline will mature over 25 years and was approved by the kingdom's cabinet, Saudi Press Agency, or SPA, quoted the information minister as saying. Saudi Electricity was also granted a SAR15 billion loan last year by the Saudi government for its expansion projects. The loans are part of a plan by the firm, which is struggling to supply uninterrupted electricity amid a population boom and industrial expansion, to invest $80 billion over the next 10 years to add 20 gigawatts of power generation capacity.
SEC, which is listed on the Saudi bourse and whose major shareholder is the kingdom's government, has a monopoly over almost all the electric power generation and all the transmission and distribution in the kingdom.
The firm has already mandated HSBC Holdings PLC (HBC) and Deutsche Bank (DB) for a potential U.S. dollar-denominated bond issue later this year aimed at raising funds to support its expansion plans, SEC's Chief Executive Officer Ali Saleh Al Barrak said last month.
The potential $1 billion-$1.5 billion bond issue will have a tentative tenor of 10 to 12 years, he added.
SEC in 2010 raised SAR7 billion through a seven-year Islamic bond, or sukuk. It issued a five-year, SAR7 billion sukuk in 2009 and a five-year SAR5 billion issue in 2007.
-By Summer Said, Dow Jones Newswires; +966 567865339; summer.said@dowjones.com
(END) Dow Jones Newswires
13-06-11 1914GMT
