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Saudi Arabia mulls utility breakup

Kingdom hires HSBC to explore demerger of state utility.

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Saudi Arabia may be about to untangle SEC and split it into smaller parts.
Saudi Arabia may be about to untangle SEC and split it into smaller parts.

 

Saudi Arabia is considering the breakup and further privatisation of state-controlled power monopoly Saudi Electricity Co (SEC), reports say.

Electricity & Cogeneration Regulatory Authority (ECRA) has hired HSBC Holdings to explore the possibility of splitting the utility into four separate entities, according to Bloomberg.

Citing four sources with knowledge of the matter, the news agency claims HSBC is in talks with potential private investors with up to 25% of each of the new companies up for grabs.

The proposal could pave the way for private power plants in the Kingdom to help meet the soaring power needs, the report says.

Saudi is looking to boost power generation capacity by 50% over the next decade with investment of around $100bn needed to meet the demand.

SEC is 81% owned by the Saudi government but is listed on the country’s stock exchange or Tadawul. 

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