Investment OpportunitiesIn The Power Sector

KSA

FOUAD ALSHEREBI

EXECUTIVE VICE PRESIDENT, GENERATION

SAUDI ELECTRICITY COMPANY

Outline

• Power Sector Development & Capital Investment.

• Investment Opportunities– IPP Program– Localization

• Power Market Development.• Closing Remarks.

Key Data

Population of Saudi Arabia: 27 Million. Area: 2.25 Million Square Km. Total Available Installed Capacity 57 GW (85% by

SEC). Number of Customers = 6.8 Million In 12,450 Cities,

Towns and Villages Average Annual Forecasted Electricity Growth = 8% Peak Load 53 GW, Summer (2013). Used Fuel at Present: Oil & Gas. Connection with the Neighbor Countries (Regional

Power Market).

On April 04,2000 SEC was Established as a Saudi Joint Stock Company as a Result of Merging Electricity Companies in Central, Eastern, Western and Southern Regions in Addition to Ten Small Companies Operating in the North of the Kingdom.

Largest Electric Utility in the Region in Terms of Capacity, Market Capital And Shareholders

2012 Revenues US$ 9bln,.

Key Data

Demand & Generation Capacity Development (MW)

2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

10,000

20,000

30,000

40,000

50,000

60,000

3,073 3,103 3,661 4,692 4,346 4,772 6,572 9,165 9,224 10,505

27,018 27,423 28,64030,308 32,603

34,470

37,913

39,973 41,92443,083

26,27227,847

29,91331,240

34,95337,400

40,405

44,94046,956

50,975

SWCC & IPP SEC Peak Load

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Transmission Network

Achievements

ItemYear 2000

End of 2012

Percent of change

Available Generation Capacity (MW) 22,060 43,083 95.3%

Sold Energy (GWH) 114,161 240,288 110.5%

Length of Transmission Network (CKM) 29,631 51,881 75.1%

Length of Distribution Network (CKM) 226,664 438,130 93.3%

Number of Customers (Million) 3.6 6.7 86.6%

Electrified Towns, Villages and Settlements 7,610 12,450 63.6%

Number of Employees 30,028 29,006 -3.4%

Demand Growth

MW

Capital Investments

15,850

35,600 27,460 24,500 24,950 21,750

37,783

30,772

26,513 28,614 34,873

34,173

16,243

17,025

18,193 19,720

21,081 22,484

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Distribution

Transmission

Generation

bill

ion

SR

More than USD 120 bln. Capital Investment UP to 2019

2014 2015 2016 2017 2018 2019

In 2007 an IPP Program was started to Motivate Local and International Investors Participation.

A model that Suits Today Electricity Market and Attract Investors was selected. The Model is Based on:

Long Term Power Purchase Agreement (PPA) ( 20 Years) for the Agreed Capacity.

SEC Full Responsibility for Fuel Supply Based on an Energy Conversion Agreement (ECA) basis.

SEC may participate in up to 50% of Project Capital.

The Land Needed for the Projects will be provided on Land Lease Agreement basis (LLA).

IPP Program

• Fuel Type is Aligned with National Fuel Policy.

• 30% of Future generation Capacity could be from IPP Projects

• Fulfillment of international and local Environment Requirements

• Projects are Tendered in a High Transparency competition to Prequalified Consortiums

IPP Program

Completion DateInvestment of the Private

SectorCapacity (MW) Name of the Project

2013 80% 1200 Rabigh 1 IPP (Completed)

2013 50% 1729 Riyadh PP11 IPP (Completed)

2014 50% 3927 Qurayyah IPP (Under Construction)

2017 50% 2000 Rabigh 2 IPP (Financial Closing)

2017 50% 600 Duba 1 IPP (Planned)

2018 50% 1800 Duba 2 IPP (Planned)

11,000 MW IPP Generation Capacity to be in service by 2018

IPP Projects

There is a good potential in Power System Industry Localization.

This Includes the Whole Supply Chain – Engineering , Manufacturing, Construction and Maintenance.

The Need is more Felt in Generation and Transmission Areas.

Few Factories are in the Process of Building their Capacity in the areas of High Voltage Gas Insulated Switchgear, Transformers and Gas Turbine Components

Industry Localization

Large and Fast Growing Market

Competitive Advantage In Term of Delivery Time and Long Term Service Agreements

Well established Prequalification Process

Enhancement of Supplier – Client Relationship

Industry Localization – Investor Drives

Shorter Delivery Time Standardized Design

Adapted to Local Environment and Requirements

Long Term Local Support Toward Power Sector Social

Responsibility Objectives

Industry Localization Benefits

Future for the Power Market Development

Regional:

Creating Electricity Market in KSA. GCC Interconnection Grid. Connection with Egypt. Regional Arab Market.

International:

Connection with European Market.

Closing Remarks

Maximizing Development of Saudi Power Sector.

Great Potentials and Business Opportunities :

• Private Sector Investments.• Energy Efficiency Measures, and Energy Services Companies .

• Regional and International Electricity Market Development.

• Partnership in Engineering , Construction, Operation

of the Power Projects with Qualified Partners.

• Localizing Industry and Services.• Joint Research & Development.

Relevant Websites For More Information

Ministry of Water and Electricity: www.mowe.gov.sa

Electricity Regulator: www.ecra.gov.sa

Saudi Electricity Company: www.se.com.sa

Thank You