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Saudi Electricity signs $308m worth of contracts

8/30/2011

Saudi Electricity Company, the state-backed power supplier, said it has signed deals worth SAR1.15bn ($307m) with Saudi companies to build the next stage of the country’s power infrastructure.

The listed company said the first contract was to construct a transformer station in Qassim; the second is to build two electricity lines, one linking Makkah and Taif and another linking Tabuk with Dhaba. The contractors have yet to be identified. The initial announcement was made by Ali S. Al Barrak, SEC CEO, reported in local press.

Saudi Arabia has been grappling with rising energy demands and a swelling population in its biggest cities. The main responsibility for this is with SEC, and in the last year the company has awarded billion of riyals of contracts to local and international contractors to build plants and extend existing facilities.

In April the company awarded two contracts to Alfanar Construction for work on a power plant and the Haramain High Speed rail project for a combined SAR 1.9 bn ($506m).

The company has also secured government and international loans, including from Bank of Japan-Mitsubishi, to fund the nationwide expansion of its electricity capacity.

The company added 508MW to its capacity in May, taking its total annual output to 50,512MW.

The deals follow the agreement struck earlier this month with National Water Company in which it will receive treated water for two power plants starting from the first quarter 2013 that will run for 30 years.

Meanwhile, Red Sea Housing Services, the manufacturer of temporary housing structures for remote sites such as gas fields, said it will delay the opening of a factory in Libya, which was planned for the second half of 2011.

The facility was expected to increase production by 30ha annually, according to a statement to investors on Riyadh’s Tadawul stock exchange. The estimated cost of opening the factory in Libya is SAR 61 million.