Utilities Middle East
Saudi Arabia seeks to boost electric grid with new funding
A Japanese bank syndicate $500mn will be used to make the Saudi electricity sector more sustainable and aligned to the national economic goals
Saudi Arabia is on course to enhancing its electric power grid to help meet growing demand.
Japan Bank for International Cooperation (JBIC) recently signed a loan agreement with Saudi Electricity Company (SEC) under its GREEN (“Global action for Reconciling Economic growth and Environmental preservation”) programme.
JBIC will provide $250mn of the US$500 million loan, alongside MUFG Bank, Bank of Yokohama, Joyo Bank, Nanto Bank, Nishi-Nippon City Bank, Hachijuni Bank, and San-in Godo Bank. JBIC will also provide a guarantee for part of the portion co-financed by the private financial institutions.
The loan is intended to provide SEC with the funds necessary for projects in the field of electricity transmission and distribution that contribute towards mitigating environmental impact, such as constructing a new substation and transmission lines to integrate renewable energy to the grid networks and introducing smart meters in Saudi Arabia.
Saudi Arabia aims to modernize and diversify its economy under a national development strategy, Saudi Vision 2030. Within this framework, the government is promoting projects that contribute towards the growth of renewable energy and energy efficiency.
As a vertically integrated elecutility that generates, transmits, and distributes electricity throughout Saudi Arabia, SEC is enhancing transmission and distribution networks for a stable supply of power from renewable energy sources for consumers, in line with the government policy to promote renewable energy.
In December 2020 JBIC signed a memorandum of understanding (MOU) on strategic partnerships in the power sector with SEC.