Saudi Electricity Company signs 2 bn deal with local banks

The Saudi Electricity Company has agreed on a 9 billion riyal ($2.4 billion) syndicated Islamic loan with seven major local banks.

The seven-year unsecured facility has a murabaha structure, a cost-plus-profit arrangement that complies with Islamic finance standards, and will be used for general corporate purposes, including capital expenditure.

The financing was provided by National Commercial Bank, Bank Albilad, Al Rajhi Bank, Riyad Bank, Samba Financial Group, Banque Saudi Fransi and Saudi British Bank.

While disclosing this on Friday, Fahad Al-Sudairi, CEO of SEC, clarified that the company provides electrical services to a growing subscriber base, which currently stands at approximately 9.8 million users in the Kingdom.

SEC is constantly working to improve operational efficiency and make a quantum leap in automating its work and improving customer services.

Al-Sudairi explained that the financing is part of the company’s plan to finance its general purposes and capital projects, the most important of which is the smart meters project, improving network reliability and linking new projects.

“A smart meter is the next generation of a gas and electricity meter. Smart meters measure how much gas and electricity you’re using, as well as what it’s costing you and display this on a handy in-home display,” Al-Sudairi said.

The meter reading shows the actual usage and users will be informed of how much the cost will be.

The plan is to install ten million smart meters before the end of March 2021.

Smart meters are considered one of SEC’s top projects for digital transformation, and represents the center of its strategy aimed at improving the level of services.

Al-Sudairi pointed out that the successful closing of this financing is a sign of strong confidence from local banks in SEC, which has a large and extended asset base throughout the Kingdom that plays a vital and necessary role in supporting and developing its economy in all its sectors.