Today, Monday, May 16, the Saudi Electricity Company announced a new step in the framework of its partnership and important commercial and economic relationship with General Electric International.
The first agreement includes the two companies’ cooperation in technologies to reduce carbon emissions and the use of hydrogen as an alternative fuel in the future, as part of Saudi Arabia’s endeavor to achieve carbon neutrality by 2060.
The second agreement signed by the Saudi Electricity Company is related to the research project for the detection and sand monitoring system to maintain the reliability of the gas turbine fleet in the desert environment and to ensure the stability of electric power supplies in the Kingdom. It was signed in the presence of Saudi Energy Minister Prince Abdulaziz bin Salman.
The company’s expansion plans
The Saudi Electricity Company plans to implement a number of development projects that require financing, some of which were obtained through agreement on credit facilities denominated in US dollars with 11 international banks.
On September 8, 2021, the Saudi Company requested financing, amounting to 2.577 billion US dollars (9.665 billion riyals), with a term of up to 3 years, to restore existing revolving credit facilities, and to finance the company’s capital expenditures and other purposes.
The Saudi Electricity Company seeks to put its huge development plan into action, which includes meeting the increasing demand for electricity in the Kingdom, reducing dependence on fossil fuels, and switching to new and renewable energy sources.
The Saudi Electricity Company signed the agreement with 11 banks: Intesa San Paolo, First Abu Dhabi Bank, HSBC Middle East, Bank of China, JPMorgan, Mizuho, MUFG, Standard Chartered, Sumitomo Mitsui Banking Company, and Natixis, and Abu Dhabi Islamic Bank.
Last March, the share of the Saudi Electricity Company recorded a decline of about 10%, despite the company announcing record business results during 2021, in addition to announcing the details of its plan to distribute profits to shareholders.
High rating of the company
In late January, Fitch International decided to raise the credit rating of the Saudi Electricity Company from A- to A with a stable outlook.
The new rating was similar to the sovereign credit rating of Saudi Arabia, where Fitch International confirmed that the rating is a result of the improvement in the company’s independent credit record.
The company’s credit record has improved after introducing a set of financial and regulatory reforms in the Saudi electricity sector, led by the Ministry of Energy and with the participation of government agencies, since November 2020.
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