(MENAFN - Arab News) A number of financial deals have been signed by Saudi Electricity Company in Tokyo and Seoul to obtain commercial loans worth SR7.5 billion to implement a new power project south of Jeddah on the Kingdom's west coast, Ali bin Saleh Al-Barrak, CEO of the company said on Saturday.
He said agreements have been signed with the Bank of Tokyo-Mitsubishi, Export-Import Bank of Korea, Mizuho Bank, Sumitomo Bank, HSBC Bank, Deutsche Bank and Apex Deutsche Bank.
The agreements will finance building a 2,650-megawatt generating plant in South of Jeddah for 12 years after a grace period of 3 years as of Dec. 19, 2013.
"Such a finance was required to implement the project in addition to the government backing," said Al-Barrak.
"We have received similar loans from export banks in the US and Europe before and this reflects the confidence of investors in the Kingdom," he added.
South Korean group Hyundai Heavy Industries is building the new oil-fired power plant, while Mitsubishi Heavy Industries will supply equipment for the plant, which is expected to be completed in 2016.
Jeddah South is just one of the power plants currently being developed by SEC, with the monopoly utility spending billions of dollars to increase generation capacity in a country where demand is growing by around 9 percent per annum.
Last month, a consortium led by ACWA Power signed a power purchase agreement with SEC to finance, build and operate the 2,060 MW Rabigh 2 power plant on the west coast of the Kingdom - a project due to cost around 1.36 billion.
Al-Barrak also said in November it planned to raise capacity at its Qassim oil-fired plant by around 360 MW over the next three years, having only recently upgraded it to produce 1,700 MW.