Reuters Summit-UPDATE 1-Saudi SEC to spend $20 bln on projects

((For other news from the Reuters Middle East Investment Summit, click here)

By Reem Shamseddine

RIYADH, Oct 26 (Reuters) - State-owned Saudi Electricity Co 5110.SE plans to spend $20 billion to add more than 10,000 megawatts (MW) of generation capacity through six independent power producer (IPP) projects, a top official said on Monday.

Saudi Arabia is facing rapid power demand growth as it builds infrastructure and heavy industry it hopes would diversify its economy away from dependence on oil revenues. The economic boom sparked by the oil rally of 2002-2008 contributed to rapid economic growth.

SEC plans to spend $80 billion to add a total of 20,000 megawatts through 2018, plus $20 on IPP projects.

Amer al-Swaha, the head of IPP at SEC, said of the total investments of around $100 billion some $46 billion would go for power generation, $30 billion would be spent on transmission and $20 billion on distribution.

IPP projects slated for completion from 2013 to 2021 include the 1,200 MW Rabigh plant, the Riyadh 2,000 MW PP11 plant, a 2,000 MW Qurayyah plant, a 1,000 MW plant in Dheba, a 2,520 MW plant in Ras Azzour and an 800 MW plant in Shuqaiq, Swaha said.

He told the Reuters Middle East Investment Summit in Riyadh five consortiums were preparing bids due on Dec 7 for the Riyadh plant.

He named them as International Power with Saudi Oger and Korea Electric Power Corp (KEPCO) (015760.KS); GDF Suez GSZ.PS with Al Jomaih; Mitsubishi Corp (8058.T) with Acwa Power and Japan's Tokyo Electric Power (9501.T); Tenaga Nasional Berhad of Malaysia (TENA.KL), Sumitomo Corp (8053.T) and Saudi Binladin Group.

The fifth consortium is Japan's Marubeni (8002.T) in an alliance with Kansai Electric (9503.T) of Japan and Saudi Masader, he said.

ENVIRONMENTALLY FRIENDLY

The Riyadh combined cycle plant would use gas as prime fuel, Swaha said. It is expected to cost between 2 to $2.5 billion, Swaha added.

"This plant will have high efficiency ... and will be environmentally friendly," he added.

Tenders for the Qurayyah plant, which is expected to cost between 3 to $3.5 billion would be issued in the first half of 2010, he said.

SEC manages 37,000 MW of power generation capacity from 45 plants.