Saudi government buys Saudi Electricity subsidiary

The Saudi Electricity Company (SEC) is transferring its ownership of its subsidiary, Saudi Power Procurement Company (SPPC), to the government, the company said on a bourse filing.

The company said it received the approval to take “all necessary legal procedures to purchase and transfer the ownership of SEC’s entire stakes in the SPPC to the government.”

SPPC is responsible for tendering renewable and conventional energy projects in order to meet the growth in the Kingdom’s power demand.

It also manages commercial agreements for the procurement and sale of power, and procuring and providing fuel.

The move is part of the electricity sector’s restructuring program, SEC said, following other regulatory reforms announced last year.

It is expected to improve the efficiency and quality of the electric service “to benefit both consumers and producers alike,” SEC said.

SEC does not expect that SPPC ownership transfer to the government would have material impact on its financial performance neither its shareholder equity.

The company will announce later the contractual frameworks, agreements and material impacts that may occur following the transfer of SPPC ownership to the government.