BUSINESS OPPORUNITIES

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• 
  BUSINESS
  OPPORUNITIES
• IN SAUDI POWER SECTOR
• 
  
  
  US-Saudi
• 
  BUSINESS OPPORTUNITIES FORUM
• 
  CHICAGO April 28-29, 2010
• 
  
  
• 
  
  
  
  
  Ali Albarrak
• 
  President C
  E O
• 
  Saudi Electricity
  Company
  
  
  
• 
  
  
  
  
• 
  

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Electricity Industry in Saudi Arabia

• Starts as 100private ownership and operation.
• Late 70S consolidated into four major power co
  (SCECO).
• The government involved as major shareholder .
• Mid 2000 All operating entities merged in one
  company
• Saudi Electricity Company (SEC).

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SAUDI ELECTRICITY COMPANY

• Incorporated from 10 operating utilities in 2000.
• Largest electric entity in the region in terms
  of capacity ,market capital and
  shareholders equity.
• Owns 85 generation and 100 transmission ,
  distribution and retail .
• Total assets over 50 billion US.
• Annual revenues 6 Billion US .
• Annual growth 6.
• 74 directly owned by the Government.

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Scope of Operations
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SEC credit strength

• High growth in demand ( 7- 8).
• Operate in a very supportive environment .
• High credit rating (AA ).
• Invest in productive assets.
• Reliable and secured fuel supply.
• government support.

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GROWTH (2000 2009)
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projects Under Execution
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Load forecast (gwatts)
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No OF CUSTOMERS
(millions)
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Generation Capacity

• generation capacity installed should meet
  the expected 7 increase in peak demand and a
  reserve margin.

Generation capacity (GW)
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POWER SECTOR CHALLENGES

• High annual growth in demand ( will continue
  6-7).
• Extremely sharp daily and yearly load curve
  (air-conditioning).
• Replacement of inefficient old generating
  units.
• High capital investment for expansion.
• The need for private sector investment .

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HOW TO MEET THE CHALLENGES ?

• More investment in power generation,TD .
• Encourage the developers for more IPP.
• Introduce the smart grid transmission system.
• Promote energy conservation and load management.
• Invest in renewable energy.

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IPP PROGRAM IN SEC

• SEC will Continue to encourage private
  investors to invest in Future Generation projects
  .
• 30 40 of Future generation will be
  IPP(BOO).
• SEC partnership will be 10-50 in the equity.
• Long term power purchase agreements (20years)
• With reasonable return on investment .

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WHY IPP?

• Providing Financial Option for Highly Capital
  Intensive Generation Projects .
• Helping To Re-Direct Available Funds To TD
  (Monopoly Activities)
• Reallocation Expenditure From CAPEX To OPEX.
• Avoiding Mismatch Between Medium Term Financing
  and Long Life PP Projects.

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SUCCESSFUL IPP ROJECTS

• Two IPP Projects in process
• 1. Rabigh Power Plant (closed financialyJuly last
  yea)
• 1200 MW / HFO
• IPCOD APRIL 2012
• Investment US 2.4 billions
• 2. Riyadh Power Plant 11 (financial close next
  month)
• 1800 MW / GAS
• IPCOD APRIL 2013
• INVESTMENT US 1.5 billions.

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IPP FUTURE OPPORTUNITIES
(INVESTMENTS OF 20B) TO BUILD 12 GW
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SAUDI NATIONAL GRID by 2018
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BUSINESS OPPORTUNITIES

• Material and Equipment supply.
• As an EPC contractor .
• Local manufacturing .
• Participate in IPP projects .
• Opportunity in consultation and engineering.
• Invest in future energy retail.

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Conclusion

• The growth of electrical energy demand in Saudi
  Arabia will continue 6-7.
• Power projects needs 80-90 billion US as
  capital investments for the next 10 years .
• Private investors have the opportunity to take
  30-40 of the generation projects as a BOO
  projects.
• US companies have the opportunity to take part
  both in EPC and IPP.
• There are oportunities in Consultation ,
  Engineering and Services in power sector.

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