Riyadh-based ACWA Power is keen to buy assets from Saudi Electricity Co (SEC) if the state-controlled utility be broken up as planned, a senior executive said.
Saudi Arabia’s utility regulator said last month that SEC would be split into several firms by the end of 2016 to increase efficiency.
Political pressure for the long-contemplated change has increased greatly since oil prices began to plunge in 2014, straining Saudi Arabia’s finances.
“If the government is selling we will happily buy,” Pascal Martese, ACWA Power’s executive director of acquisitions and project finance, told reporters at a conference in Dubai.
The regulator said a break-up of SEC would be open to competition and stakes in the new firms would be offered either to local citizens through the stock market, or to local or international corporate partners. “This is our business and we think we can value it properly and give a good deal to the government and then deliver reliable power capacity after we take over,” Martese said.
Privately-held ACWA describes itself as an investor, developer, co-owner and operator of a portfolio of plants in Europe, Asia and Africa that generate 18 gigawatts of power and produce 2.5 million cubic metres of desalinated water a day.
Martese said ACWA was in principle interested in all SEC’s assets. SEC, whose profit fell by more than half last year, has a monopoly on electricity transmission and distribution.
He added that the privatisation process could start with state-owned Saline Water Conversion Corporation (SWCC) which both produces water and generates electricity. ACWA would fund any acquisitions mostly through bank finance, although bonds could also be a component, but
SEC had not yet approached his firm about selling its assets and Saudi Arabia was unlikely to privatise everything at once, he said.