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Saudi Electricity Company Locks $2.4 bln Financing Deal

The Saudi Electricity Company signed a local co-financing agreement worth 9 billion Saudi Riyals with 7 major banks in the Kingdom
The Saudi Electricity Company signed a local co-financing agreement worth 9 billion Saudi Riyals with 7 major banks in the Kingdom
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Saudi Electricity Company Locks $2.4 bln Financing Deal

The Saudi Electricity Company signed a local co-financing agreement worth 9 billion Saudi Riyals with 7 major banks in the Kingdom
The Saudi Electricity Company signed a local co-financing agreement worth 9 billion Saudi Riyals with 7 major banks in the Kingdom

The Saudi Electricity Company (SEC) 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.

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.

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.

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Growth of Non-Oil Sectors Position Saudi Arabia Among Leading Global Economies

 King Abdullah Port, Saudi Arabia (Asharq Al-Awsat)
 King Abdullah Port, Saudi Arabia (Asharq Al-Awsat)
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Growth of Non-Oil Sectors Position Saudi Arabia Among Leading Global Economies

 King Abdullah Port, Saudi Arabia (Asharq Al-Awsat)
 King Abdullah Port, Saudi Arabia (Asharq Al-Awsat)

Saudi Arabia’s economy continued its upward trajectory in 2024, solidifying its status as one of the world’s most stable and fastest-growing markets. This momentum is being driven by the Kingdom’s unwavering commitment to economic diversification — a central pillar of Vision 2030 — which has significantly boosted non-oil sectors, expanded private sector participation, and increased the economy’s ability to generate jobs and attract investment.

Non-oil activities now contribute a record 51% to real GDP, marking a major milestone in the country’s transformation journey.

According to the Vision 2030 annual report, Saudi Arabia’s real non-oil GDP grew by 3.9% in 2024 compared to the previous year, fueled by ongoing investments across diverse sectors. Non-oil activities alone expanded by 4.3% year-on-year, reflecting the success of structural reforms and strategic national programs.

At the heart of Vision 2030 is the ambition to build a thriving economy. One of the key benchmarks is improving Saudi Arabia’s position in global GDP rankings. In 2016, the Kingdom ranked 20th worldwide. By 2030, it aims to break into the top 15, with a targeted GDP of SAR 6.5 trillion ($1.7 trillion).

In early 2024, Saudi Arabia adopted a new moving-chain methodology to measure GDP more accurately. Under this updated system, real GDP has grown consistently since 2016 at a compound annual rate of 1.75%, excluding the pandemic-induced downturn in 2020. Non-oil GDP, meanwhile, has shown even stronger performance, expanding at a 3.01% annual pace over the same period.

While the 2024 non-oil GDP target was narrowly missed, the outcome reached 98% of the goal — a strong showing amid global uncertainties. Leading contributors included wholesale and retail trade, hospitality, transportation, logistics, and information technology.

Non-oil exports also played a pivotal role in economic growth, achieving over 75% of their annual targets. Gains came primarily from increased exports of non-oil goods and a sharp rise in re-exports, underlining Saudi Arabia’s growing role in global trade flows.

The private sector’s role in the economy has expanded significantly, with its contribution to GDP reaching 47% — surpassing the 2024 target. Since 2016, this contribution has grown at a compound annual rate of 1.94%.

This progress reflects ongoing efforts to reduce reliance on oil, empower private enterprise, and enhance the Kingdom’s global competitiveness. Key initiatives include national strategies aimed at unlocking sectoral potential, the Public Investment Fund’s push to stimulate private capital, and the successful drive to attract global companies to relocate their regional headquarters to Saudi Arabia.

The government continues to foster a dynamic business environment, supporting small and medium enterprises (SMEs) through regulatory reforms and major development projects. These efforts span several sectors, including manufacturing, transport, logistics, and foreign investment.

Global Confidence, Positive Outlook

International confidence in the Saudi economy remains strong. In 2024, the world’s top three credit rating agencies affirmed the Kingdom’s sovereign creditworthiness. Moody’s assigned a rating of “Aa3” with a stable outlook; Fitch rated it “A+” with a stable outlook; and S&P awarded an “A/A-1” rating, also with a stable outlook.

Global institutions are also optimistic about the Kingdom’s growth prospects. The Organisation for Economic Co-operation and Development (OECD) forecasts Saudi economic growth at 3.8% in 2025 and 3.6% in 2026 — well above the global average.