Saudi Electricity Company has secured $1.3 billion to finance smart meters and other green energy projects.
The funding, the first of its type, was secured through Green Sukuk, an Islamic investment bond. The offer was oversubscribed by almost four times by investors from Asia, Europe and the Middle East.
“This Sukuk issuance comes in line with SEC’s strategy to diversify its funding sources, broaden its investor base in the international markets and supports its aims to seek innovative and sustainable finance for our green projects portfolio,” said Fahad Al Sudairi, SEC’s President and Chief Executive Officer.
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SEC initiated its approximately 10 million smart meter rollout in January of this year. The aim is to achieve 80% implementation by the end of December and 100% by the end of March 2021.
The project is part of SEC’s effort to increase the reliability of its distribution networks and improve metering, service quality and customer satisfaction.
“The 10 million smart meters will considerably contribute to optimal usage of energy in the Kingdom, as well as improving networks in terms of demand side management and overall access to electricity,” says the company.
The Green Sukuk funding will also be used to support the growth and development of renewable energy projects. A pipeline of nine wind and solar plants are under development and due to be grid connected during the 2020-21 year.
SEC is the national Saudi electricity company. It is the Kingdom’s leading producer and has a monopoly on transmission and distribution.
The company has set targets of 27.6GW of renewable generation by 2025 and a greenhouse gas emission reduction of 25% in that year compared to the 2016 level.
In addition to its renewables ambitions, SEC is diversifying its generation mix with investments in concentrated solar power and conversion of simple cycle power plants to combined cycle. Diesel fuel also is being replaced.
SEC also is bringing online new users and up to July had connected 200,000 remote and other new customers to the grid.
