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Mon 19 Sep 2016 10:13 AM

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Saudi Electricity Co signs $1.33bn financing for projects

SEC announced plans in August to privatise its assets by the end of the year as part of a drive to increase efficiency

Saudi Electricity Co signs $1.33bn financing for projects

Saudi Electricity Co. (SEC) has signed a 5 billion riyal ($1.33 billion) murabaha-structured Islamic financing to help support its projects, the firm said in a bourse filing on Monday.

The facility - a cost-plus-profit agreement which is compliant with Islamic financing principles - lasts for seven years and was supplied by three local banks: Banque Saudi Fransi, National Commercial Bank and Samba Financial Group.

SEC announced plans in August to privatise its assets by the end of the year as part of a drive to increase efficiency in the kingdom's utilities.

"We expect to complete the planned privitisation of assets this year," SEC chairman Saleh al-Awaji said.

Saudi Arabia's utility regulator said in February that SEC would be split into several firms by the end of 2016 to increase efficiency.

Awaji said demand for power in the country had declined for the first time in the company's fifteen year history after a removal of government subsidies.

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