| Saudi Electricity Company’s green sukuk highlights the focus of major power companies to reduce their carbon footprint and usher in the era of renewable energy in the electricity sector.
In September, the company said it had successfully raised USD 1.3 billion, across dual five-year tranches of USD 650 million each. The Islamic bond secured orders of USD 5.2 billion and received high demand from institutional investors across the Middle East, Asia, and Europe.
The sukuk comes on the heels of SEC’s Green Sukuk Framework, which highlighted the company’s aspirations to reduce its carbon footprint and focus on renewable energy capital projects. The framework adheres to the globally renowned Green Bond Principles issued by the International Capital Market Association to ensure transparency.
The proceeds from the sukuk will be deployed for capital expenditure for construction and/or operation of the transmission and/or distribution infrastructure for connecting renewable energy sources to the grid and smart metres, the company said. The SEC identified eight renewable energy projects, including the under construction Dumat Al Jandal wind project, which will be one of the projects that could be financed through green sukuk proceeds.
Other Saudi construction projects are also securing funding amid record-low interest rates.
A number of other new projects are also under way, despite COVID-19, due to a strong environment in debt markets with investors eager to release funds for fiscally sound Saudi construction developments.
ACWA Power, a Saudi developer, investor and operator of power generation and desalinated water plants, said in September it had successfully signed a senior financing agreement for the USD 650 million Jubail-3A IWP.
It is the fourth seawater reverse osmosis (SWRO) desalination project to be awarded in the kingdom in the past three years, as part of the government’s drive to upgrade its power sector.
Jubail-3A IWP, with the capacity of 600,000 cubic metres per day will utilise reverse osmosis (RO) technology. The engineering, procurement and construction (EPC) contract for the project was awarded to a consortium of SEPCOIII, Power China and Abengoa. The operations and maintenance agreement was signed with an affiliate of First National Operations & Maintenance Co. Ltd. (NOMAC).
SMART CITY
Progress on NEOM, one of the world’s most innovative projects, also continues apace as Saudi authorities build a brand new city that will showcase the country’s innovation and creativity.
In August, NEOM Co. awarded a contract to US-based Bechtel to execute project management work on the development of the primary, base infrastructure for NEOM as the USD 500 billion project on the Red Sea emerges as a leading destination to attract talent and investment.
“NEOM’s next generation cognitive cities will support its cutting-edge urban environments, improving the lives of residents and businesses far beyond the capabilities of today’s smart cities,” the company said. “NEOM’s infrastructure will utilise AI, robotics, and human-machine fusion to deliver greater predictive intelligence and enable faster decision making across all NEOM sectors.”
Brendan Bechtel, chairman and chief executive officer of Bechtel, said NEOM is one of the most complex projects he has ever worked on.
“The vision for a futuristic, innovative and sustainable ecosystem is unique and bold, and we believe NEOM will change the way new cities are developed by future generations. We have helped our customers shape the kingdom’s history with many key projects and we are honoured to be a partner in building its future.”
In July, NEOM had awarded STC Group a contract to establish a 5G network infrastructure that mirrors NEOM’s aspiration of being a knowledge-based highly connected place to live, work and play.
“stc will build a wireless 5G network enabling present and future 5G applications across NEOM. With a speed and capacity 10 times higher than standard 4G networks, 5G in NEOM will enable numerous segments such as Internet of Things (IoT), data analytics, virtual reality, augmented reality, smart homes, and autonomous vehicles. It will also provide the public safety network for NEOM security services,” the company said in a statement.
The digital project will enable NEOM to develop a “cognitive” city and lay the platform for the development of a smart city that will be home to future-focused sectors, such as robotics, artificial intelligence (AI), and human machine interface technologies.
Meanwhile, the Red Sea Development project, also being developed on the Saudi west coast, saw contract awarded for airside infrastructure works for the destination’s international airport, set to open in 2022.
Developer The Red Sea Development Company (TRSDC) awarded the project to a joint venture between leading Saudi contractors Nesma & Partners Contracting Co. Ltd and Almabani General Contractors.
The progress on large-scale mega projects, despite the pandemic, speaks to the authorities’ focus on ensuring its growth developments do not stall and the economic momentum stays the course. |
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