Saudi Electricity Company (SEC) has signed a US$567.5 million export credit agency (ECA) facility for its Saudi Arabia-Egypt electricity interconnection project. It has also secured a syndicated facility amounting to US$3 billion for refinancing.
The 14-year ECA facility was arranged by Standard Chartered Bank and Sumitomo Mitsui Banking Corporation, and will be guaranteed by the Swedish Export Credit Agency, with funding from the Swedish Export Credit Corporation.
Last October Saudi Arabia and Egypt signed contracts for a US$1.8 billion interconnection project, involving the exchange of 3,000 megawatts of electricity. Construction began this year, with completion expected in 2026. There are plans for additional power connection networks between Arab countries.
As regards the refinancing facility, SEC says it has increased the size due to robust interest from regional and international lenders.
The five-year unsecured facility will be used to refinance an existing syndicated facility, initially raised in 2017 and set to mature this month. The funds can be used for capital expenditures.
The syndicate comprises Standard Chartered Bank, HSBC, Intesa Sanpaolo, Mizuho Bank, MUFG Bank, Sumitomo Mitsui Banking Corporation, Industrial and Commercial Bank of China, State Bank of India, Bank of China, Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, First Abu Dhabi Bank, National Bank of Kuwait, KfW IPEX-Bank and Societe Generale. SEC has appointed Mizuho Bank and Abu Dhabi Commercial Bank as the agents for the facility.
"SEC's obtainment of this international syndicated facility as well as the ECA facility, both achieved at favourable terms and pricing, is testament to the company's substantial asset base, high-quality credit, and ties with the kingdom's sovereign credit rating," comments SEC chief executive officer Khaled Al-Gnoon.
"The increased interest from the regional and international banking community is also encouraging, and speaks about Saudi Arabia's strong economic fundamentals, especially amid volatile market conditions," he adds. “We look forward to leveraging the international syndicated facility to serve our capex requirements, resulting in long-term growth for the business and our investors.“
SEC produces electricity via 45 power plants and operates a transmission and distribution network. It is 74.3% government-owned.
Last October SEC and Egyptian Electricity Transmission Company signed contracts with three consortia of international and local companies to implement the inconnection project, which uses a 500-kilovolt high-voltage, direct-current (HVDC) technology.
There will be three substations – the East Madinah Station, the Tabuk Station in the Kingdom, and the Badr Station in East Cairo – linked by overhead transmission lines running 1,350 kilometres and marine cables across the Gulf of Aqaba with a length of 22 km.
National Contracting Company (NCC), Saudi Services for Electro Mechanic Works (SSEM) and Hyundai Construction and Engineering Company signed contracts for the overhead lines in Saudi Arabia.
China Electrical Engineering Company, Chinese Xi’an Company and Giza Cable Company signed contracts for the overhead lines on the Egyptian side.
A Hitachi ABB Power Grids-Orascom Construction consortium will build the HVDC converter station in northeast Cairo and the transition station in Taba, Sinai.
Prysmian Group was awarded a contract for the submarine cables.
The first stage of the project is scheduled to start operation in late 2024 with a capacity of 1.5 gigawatts, and the balance of the capacity in mid-2025.