Loan to Saudi Electricity Company under GREEN Operations
Supporting Low-carbonization in Electricity Transmission and Distribution Sector of Saudi Arabia
- Region: The Middle East
- Untied Loans
The Japan Bank for International Cooperation (JBIC; Governor: MAEDA Tadashi) signed on July 7 a loan agreement amounting to up to USD500 million, of which JBIC's portion is USD250 million, with Saudi Electricity Company (SEC). The loan is co-financed with MUFG Bank, Ltd., The Bank of Yokohama, Ltd., The Joyo Bank, Ltd., The Nanto Bank, Ltd., THE NISHI-NIPPON CITY BANK, LTD., The Hachijuni Bank, Ltd., and the San-in Godo Bank, Ltd. JBIC will also provide a guarantee for part of the portion co-financed by the private financial institutions.
The loan is provided as part of JBIC's GREEN operations*1
, and it is intended to provide SEC with the funds necessary for projects in the field of electricity transmission and distribution that contribute toward mitigating environmental impact, such as constructing a new substation and transmission lines to integrate renewable energy to the grid networks and introducing smart meters in Saudi Arabia.
The Government of Saudi Arabia is planning to modernize and diversify its economy under its national development strategy, Saudi Vision 2030. Under this vision, Saudi Arabia is promoting projects that contribute toward the growth of renewable energy, energy efficiency, and more. As a vertically integrated electric utility that generates, transmits, and distributes electricity throughout Saudi Arabia, SEC is enhancing transmission and distribution networks for a stable supply of power sources from renewable energy for consumers, in line with the Government policy to promote renewable energy. Through this loan, JBIC supports the efforts of the Government of Saudi Arabia and SEC that contribute toward global environmental preservation.
In December 2020, JBIC signed a memorandum of understanding (MOU) on strategic partnerships in the power sector with SEC*2
, and this loan is one outcome of the MOU. Under the MOU, JBIC will promote energy transition and environmental and social sustainability in Saudi Arabia by developing solutions to SEC's challenges in the power sector through investments by Japanese companies and/or introduction of Japanese products and technologies.
As Japan's policy-based financial institution, JBIC will continue to support global environmental preservation efforts by drawing on its various financial facilities and schemes for structuring projects and by performing its risk-assuming function.