SEC Seeks Expansion Cash

Saudi Electricity Company (SEC) is holding talks with local and international banks for loans worth $3-5bn, according to a Reuters report citing two unnamed sources. One source said that “the company is trying to mop up cash at a good price… They are exploring all options available in the debt market.”

SEC last year issued SR4.5bn ($1.2bn) of sukuk and $2.5bn of international bonds to help fund its expansion program. Two previous Sukuk raised $2bn in 2013 and $1.75bn in 2012 (MEES, 31 January 2014).

Like all regional state-owned generators, SEC’s available cash for capacity expansion is limited by a requirement to sell electricity at heavily subsidized prices. Hence, SEC also received a government loan in March 2014 for SR49.4bn ($13.2bn), to be released to SEC by the Ministry of Finance over five years and subsequently repayable in installments over 25 years. (CONTINUED - 288 WORDS)