Wednesday, 29 May 2024

Saudi Power Procurement Owned by SEC, Transfers Its Ownership to Government


اقرأ المزيد

Saudi Electricity Company (SEC) announced on Monday that it has received the letter from His Royal Highness the Minister of Energy, Chairman of the Ministerial Committee for the Restructuring of the Electricity Sector.

The letter states that the Cabinet has issued a resolution (ref. no. 227) dated 18/04/1443H regarding approving taking all necessary legal procedures to purchase and transfer the ownership of SEC’s entire stakes in the Saudi Power Procurement Company (SPPC) to the government ownership.

This resolution comes as part of the electricity sector’s restructuring program and is a continuation of the regulatory and structural reforms announced in 15 November 2020 by the Ministerial Committee for the Restructuring of the Electricity Sector, with oversight of the Supreme Committee for energy mix for the electricity generation and empowering renewable energy sector, headed by His Royal Highness the Crown Prince Mohammed bin Salman bin Abdulaziz – Deputy Prime Minister and Chairman of the Council of Economic and Development Affairs.

The intentions of this plan are to reinforce transparent commercial relations among the electricity system players as well as activating operating the sector on economic fundamentals.

These will contribute in achieving the Kingdom’s electricity sector objectives including lower usage of liquid fuels for electricity production, increased environmental protection, increasing the reliability of electricity transmission and distribution grid to facilitate the production of electricity from renewable energy sources in order to achieve the optimal energy mix for electricity production and improving and automating the distribution networks. These will ultimately contribute in achieving aspired objectives to enhance the quality of the electric service to consumers in line with the ambitions of Vision 2030.

SPPC is responsible for the competitive tendering of renewable and conventional energy projects in order to meet the growth in power demand, manage the commercial agreements for the procurement and sale of power and procuring and providing fuel as well as improving its usage efficiency.

The SPPC ownership transfer comes as part of the electricity sector comprehensive reforms in order to improve the efficiency and quality of the electric service, which is expected to benefit both consumers and producers alike.

SEC does not expect that SPPC ownership transfer to the government would have material impact on its financial performance neither its shareholder equity. SEC will announce later the contractual frameworks, agreements and material impacts that may occur following the transfer of SPPC ownership to the government.