State-run Saudi Electricity Company (SEC) has invited bidders for a SR9.5 billion ($2.53 billion) power plant project in Riyadh as part of efforts to meet soaring demand, a senior company official said.

The 2,000 MW combined cycle plant project in the Saudi capital will start its first phase of operation by 2012, Amr Aswaha, head of projects for independent power projects (IPP), told Reuters.
Bidding ends in December with a decision expected in March 2010, he added, without giving details.
Saudi Electricity, the largest Gulf utility by market value, is trying to satisfy a demand for power that has soared sharply in the past two years as many infrastructure projects are underway.

Rabigh plant
Separately, SEC signed a contract with a consortium led by Korea Electric Power Corporation (Kepco) to build the 1,200 MW Rabigh fuel-oil fired power plant.
Funding for the SR9.5 billion project will be provided by a consortium of banks led by Alinma Bank which expects to contribute about $500 million, said Abdulmohsen Al-Fares, the bank’s chief executive officer.
Other banks include Bank of China, Calyon, HSBC, National Commercial Bank, Banque Saudi Fransi, Samba Financial Group and Standard Chartered, Saudi Electricity said in a statement.
The power consortium includes Saudi’s ACWA Power International and will deliver electricity to SEC under a Power Purchase Agreement (PPA) over 20 years. SEC will have 20 per cent of the project.
The plant will be built in two phases, the first of which will deliver 600 MW by 2012 while the next 600 MW will be delivered by 2013.

Credit secured
In another development, SEC said it had secured a SR4.1 billion loan from the US Export-Import Bank and Canada’s Export Development Credit to finance the purchase of power generation units.
The 12-year loan is to fund the purchase of 23 turbines made by US giant General Electric, the official Saudi Press Agency reported.
The units will help boost power generation capacity in Riyadh, the Saudi capital, as well as in some areas in the eastern part of the country by about 2,900 MW, the company said in a statement posted on the Saudi exchange’s Web site.
Saudi Arabia has been working to boost power generation capacity to meet increased demands linked to a series of new mega-projects in the kingdom, as well as a growing population.
The loan comes at a time when the global credit crunch has tightened lending, even in the oil-rich kingdom. The country’s central bank recently cuts its reverse repurchase rate to 0.25 per cent, and a new Islamic and conventional bonds market began trading on the Saudi stock exchange in an effort to give companies greater access to credit.
It was also announced that SEC had obtained a SR2.6 billion soft loan from a state-owned fund to help finance power generation projects.
The Public Investment Fund (PIF) extended the 15-year loan for projects Saudi Electricity plans in the capital Riyadh, the Gulf’s largest utility by market value said in a statement posted on the Saudi bourse’s website.

Temporary power
Featuring in SEC-related news in recent weeks was Aggreko PLC, a supplier of temporary power and temperature control, which said that it signed a contract to provide 100 MW of temporary power to the Saudi Electric Company (5110.SA) to help overcome seasonal power shortages in Saudi Arabia.
The contract was expected to last for a minimum of three months and would take to over 170 MW the total capacity being supplied by Aggreko to Saudi Electric.
Aggreko’s International Power Projects business, which serves the requirements of power utilities, governments, armed forces and major industrial users, is supplying the power at six sites in the Qassim region, north of the Saudi capital Riyadh.

Huge spend
The head of Saudi Electricity said the company plans to spend $28 billion in the next three years to meet rising demand in the kingdom.
Ali Al-Barrak, chief executive officer of the Riyadh-based utility, told Bloomberg the firm also planned to invest $70 billion by 2018 to add 25,000 MW and match demand spurred by a $400 billion, five-year government-spending programme and a growing population.
Saudi Electricity made SR715 million in the three months to June 30, 2009 compared with SR781 million in the year-earlier period, it said in a statement on the bourse's website.
Three analysts surveyed by Reuters had expected net profit of SR794.33 million on average.
Operating profit fell by 3 per cent to SR622 million in the quarter.