Saudi power utility agrees $13bn interest-free loan

State-owned company signs agreement with the kingdom's Ministry of Finance

(Getty Images - for illustrative purposes only)

(Getty Images - for illustrative purposes only)

State-owned power utility Saudi Electricity Co (SEC) has agreed terms and signed an interest-free loan of SR49.4 billion ($13.17 billion) with the kingdom's Ministry of Finance, the company said in a statement.

The loan has a lifespan of 15 years but there is a grace period of ten years before repayments begin, the statement to Riyadh's bourse said.

SEC in March said a royal decree had granted it the soft loan to help fund power generation projects, subject to the completion of talks with the ministry.

The company plans to spend SR622 billion to 2023, adding 40,000 megawatts of installed generating capacity and expanding transmission and distribution networks, SEC chief executive Ziyad Alshiha said at the time.

He added that power usage in Saudi Arabia had risen by around 7 to 8 percent a year over the last decade and would continue to rise.

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