Saudi Electricity Co. to Settle $1.5 Billion in Historical Obligations to the State
Saudi Electricity Co. has agreed to settle SR5.687 billion ($1.5 billion) in legacy obligations as part of a final settlement approved by an executive panel.
Saudi Electricity Co. (SEC) has agreed to settle historical obligations totaling SR5.687 billion ($1.5 billion) to the state, following an executive panel's approval of a final settlement.
The amounts, which were disputed due to discrepancies in fuel and electricity handling costs, will be addressed under terms agreed by SEC, the Ministry of Energy, and the Ministry of Finance.
The total disputed sum reached SR10.3 billion, with a working team from the Ministries of Energy and Finance, along with the Saudi Electricity Regulatory Authority, conducting a detailed review of the transactions.
This settlement aligns with Saudi Arabia’s Vision 2030 goals of improving public service efficiency.
The financial settlement will be processed using the Mudaraba instrument, a long-term, Sharia-compliant financial tool that helps SEC strengthen its capital base.
The SEC confirmed the reclassification of the amount into the Mudaraba agreement, which now totals SR173.607 billion.
SEC expects no significant impact on its dividend distribution, and the financial effect will be reflected in the company’s 2024 financial statements.
In November 2024, Moody’s assigned SEC an Aa3 rating, reflecting its strong creditworthiness and ability to meet short-term obligations.
The settlement is seen as a crucial step in SEC’s financial restructuring, supporting its role as a reliable energy provider in the Kingdom.
The amounts, which were disputed due to discrepancies in fuel and electricity handling costs, will be addressed under terms agreed by SEC, the Ministry of Energy, and the Ministry of Finance.
The total disputed sum reached SR10.3 billion, with a working team from the Ministries of Energy and Finance, along with the Saudi Electricity Regulatory Authority, conducting a detailed review of the transactions.
This settlement aligns with Saudi Arabia’s Vision 2030 goals of improving public service efficiency.
The financial settlement will be processed using the Mudaraba instrument, a long-term, Sharia-compliant financial tool that helps SEC strengthen its capital base.
The SEC confirmed the reclassification of the amount into the Mudaraba agreement, which now totals SR173.607 billion.
SEC expects no significant impact on its dividend distribution, and the financial effect will be reflected in the company’s 2024 financial statements.
In November 2024, Moody’s assigned SEC an Aa3 rating, reflecting its strong creditworthiness and ability to meet short-term obligations.
The settlement is seen as a crucial step in SEC’s financial restructuring, supporting its role as a reliable energy provider in the Kingdom.