Saudi SEC obtains $3.56 billion in financing from 15 lenders.

Saudi Energy Company, announced on Thursday that it has secured more than $3.56 billion in funding to support both its long-term expansion and the Saudi Arabia-Egypt electricity connectivity project.

According to comments made to the Tadawul stock exchange, where its shares are traded, SEC reached a deal to receive a $3 billion international syndicated credit denominated in US dollars as well as a $567.5 million Export Credit Agency (ECA) facility.

The $3 billion unsecured facility, with a five-year term, will be obtained from 15 regional and international lenders. The existing syndicated facility, which was raised in 2017 and is due to maturity this month, will be refinanced using it.

Additionally, the credit will pay for the company’s capital expenditure requirements to support long-term growth for both the business and the investor.

Along with Standard Chartered, HSBC, Intesa Sanpaolo, Mizuho Bank, MUFG Bank, Sumitomo Mitsui Banking Corporation, Industrial and Commercial Bank of China, State Bank of India, Bank of China, Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, First Abu Dhabi Bank, and National Bank of Kuwait, the 15-bank syndicate also includes Standard Chartered, HSBC, Intesa Sanpaolo, Kuwait National Bank, and others.

The Saudi Arabia-Egypt electrical interconnection project will be funded by SEC in the meanwhile using the ECA facility, which has a 14-year tenor.

In October, contracts totaling $1.8 billion were signed in Cairo for the construction of transmission plants and the connection of power grids between Saudi Arabia, the region’s largest economy, and Egypt, the country with the largest Arab population.

The project will be implemented by three consortia made up of international and local businesses, an, with a peak transmission capacity of 3,000 megawatts.

Egypt is currently experiencing an energy crisis, and on Wednesday, Egyptian Prime Minister Mostafa Madbouly announced that the nation will launch a new initiative to cut down on electricity consumption the following week.

The new regulations would eliminate outdoor lighting in public squares, cut back on lighting at sizable sports complexes, and turn off electricity in government buildings after regular business hours. Shopping centres will also receive directives to set their central air conditioning at 25°C or higher.

Together with Standard Chartered Bank and Sumitomo Mitsui Banking Corporation, SEC signed the ECA agreement. It will be supported by the Swedish Export Credit Corporation and insured by the Swedish Export Credit Agency, subject to preceding requirements being met.

According to Khaled Al Gnoon, chief executive of SEC, “SEC’s acquisition of the international syndicated facility as well as the ECA facility, both achieved at favourable terms and pricing, is testament to the company’s substantial asset base, high-quality credit, and connections with the kingdom’s sovereign credit rating.”

In light of the unstable market environment, he continued, “The increased interest from the regional and global financial community is also promising and speaks to Saudi Arabia’s strong economic fundamentals.