2nd UPDATE:Saudi Electric Co Inks Offtake Deal With Riyadh Power Plant

15th Jun 2010 18:14

(Adds detail) RIYADH (Zawya Dow Jones)--Saudi Electricity Co. (5110.SA), or SEC, on Tuesday signed a contract to buy, over 20 years, the entire output of the planned "Riyadh 11" independent power plant that will have a capacity of 1,730 megawatts. The first phase of the power plant project, whose cost is estimated at 7.9 billion Saudi riyals ($2.1 billion), is expected to start operations in May 2012, with the second phase seen completed by May 2013, SEC said at a press conference. Durmaa Electricity Co., the joint venture that will build, own, and operate the plant, will be 50% owned by SEC while the other 50% will be held by a consortium comprising the local firm Aljomaih Holding Co., French energy company GDF Suez (FSZ.FR), and Japan's Sojitz Co. (2768.TO). Foreign and Saudi banks have granted a $1.1-billion loan to the consortium led by SEC for the project, which will meet 15% of Riyadh's power demand. The loan was priced at 250 basis points above London Interbank Offered Rate, or LIBOR, and Saudi Interbank Offered Rate, or SIBOR, respectively, a source close to the deal told Zawya Dow Jones. Calyon, KFW, Standard Chartered, Societe Generale, Intesa Sanpaolo, Credit Industriel et Commercial and Canada Export Development Bank granted the consortium a $500 million loan at 250 basis points above LIBOR. Saudi Arabia's Samba Financial Group (1090.SA), Banque Saudi Fransi (1050.SA), Alinma Bank and National Commercial Bank gave the group $600 million at 250 basis points above SIBOR. Saudi Electricity, whose major shareholder is the Saudi government, has a monopoly over almost all the electric power generation and all the transmission and distribution in the kingdom. The firm said the kingdom's power demand is seeing an 8% rise per year and that 30,000 megawatts have to be added by end of 2020 to the current 46,000 megawatts power generation capacity which will cost SAR170 billion. SEC shares finished trading 0.37% lower at traded flat at SAR1330. -By Summer Said, Dow Jones Newswires; +966-546-842-373; [email protected] Copyright (c) 2010 ABQ Zawya Ltd. and Dow Jones & Company, Inc. (END) Dow Jones Newswires June 15, 2010 13:14 ET (17:14 GMT)