S​audi Electricity looks to diversify portfolio​, raise tariffs​: ​CEO

Saudi Electricity Co. (SEC) is aiming to diversify its portfolio by securing investment opportunities that can offset financial pressures on its core business, Reuters has reported, citing the company’s chief executive Ziyad Al-Shiha.

Al-Shiha said the power giant is in desperate need of financial resources, as demand for electricity grows rapidly in the kingdom. 

Meanwhile, it has held off from raising water and electricity prices as such tariffs remain a sensitive area for residents. Current government policy mandates that prices remain low, which has led SEC’s profits to come under pressure. Last month, the company announced that its first quarter net losses had doubled to SAR 1.94 billion. 

Al-Shiha emphasized his view that the government should eventually allow for an increase in tarrifs in order to help curb consumption and reduce the cost of supplies in the kingdom.

SEC is said to currently spend between SAR 40 billion and SAR 60 billion a year to meet power demand in the country, which is growing at six percent to eight percent annually, Al-Shiha noted.

The company announced earlier that it had awarded an engineering​, procurement​, and ​construction​ (EPC) contract to Black & Veatch,​ which will manage the conversion process at its Qassim I​I and III power plants to boost capacity by 360 megawatts (MW).  The project’s implementation is expected to reduce SEC’s need to use more fuel.

It also previously announced a partnership with oil giant Saudi Aramco to build the Fadhili power plant, which is linked to the development of a major gas plant. The project is to include the participation of the private sector, in an attempt to ease SEC's financial burden.

​ SEC is considered the largest utility provider in the Gulf region.​