Saudi Electricity Company (SEC) successfully priced a $2.75 billion dual-tranche senior unsecured RegS Sukuk on February 12, 2025, as announced in a press release via the Saudi Press Agency. The offering comprises a $1.25 billion 10-year green Sukuk tranche with a profit rate of 5.489% per annum, maturing on February 18, 2035, and a $1.5 billion 5-year conventional Sukuk tranche with a profit rate of 5.225% per annum, maturing on February 18, 2030.
Context and Background
This issuance marks SEC’s fourth green Sukuk tranche under its Green Sukuk Framework, reinforcing the company’s commitment to financing renewable energy and energy efficiency projects. Since 2020, SEC has raised a total of $3.75 billion through green Sukuks, underscoring its dedication to decarbonization and expanding its green project portfolio. The company maintains high investment-grade credit ratings from Moody’s (Aa3 stable), Fitch (A+ stable), and Standard & Poor’s (A positive), reflecting its strong financial standing and strategic role in Saudi Arabia’s energy sector.
Key Details
The Sukuk issuance attracted robust investor demand, with an order book exceeding $12 billion—an oversubscription of 4.3 times. SEC held a virtual investor roadshow on February 10, drawing strong interest from Asia, Europe, and the Middle East. Acting CEO of SEC, Eng. Khaled Al-Ghamdi, stated: “This issuance reaffirms the company’s ability to attract strong investor interest in international markets, supported by its robust credit standing and pivotal role in providing sustainable and highly reliable energy solutions.” The proceeds from the green tranche will be allocated to financing or refinancing eligible green projects, advancing Saudi Arabia’s energy transition.
Implications and Impact
The successful pricing and oversubscription demonstrate international investor confidence in SEC’s credit profile and Saudi Arabia’s energy sector reforms. The dual-tranche structure, featuring a dedicated green Sukuk, aligns with global trends toward sustainable finance and positions SEC as a leader in green capital markets. The issuance supports the Kingdom’s efforts to diversify funding sources and attract foreign investment in line with its economic transformation agenda.
Vision 2030 Alignment
This Sukuk issuance directly supports Saudi Vision 2030 by financing projects that enhance renewable energy capacity and energy efficiency. As Eng. Khaled Al-Ghamdi noted, the funds will inject investments into electricity grid infrastructure, integrate renewable energy sources, and accelerate digitalization and automation. SEC’s net-zero ambition by 2050 complements the Kingdom’s broader sustainability goals, reinforcing Saudi Arabia’s commitment to a diversified, sustainable economy under Vision 2030.
20 Questions
Q1. What is the total size of SEC’s dual-tranche Sukuk offering?
A1. The total size is $2.75 billion, comprising a $1.25 billion green tranche and a $1.5 billion conventional tranche.
Q2. When was the Sukuk priced?
A2. The Sukuk was priced on February 12, 2025, as announced by Saudi Electricity Company via the Saudi Press Agency.
Q3. What are the maturity dates for the two tranches?
A3. The green tranche matures on February 18, 2035 (10-year), and the conventional tranche matures on February 18, 2030 (5-year).
Q4. What is the profit rate for the green Sukuk tranche?
A4. The green Sukuk tranche has a profit rate of 5.489% per annum.
Q5. What is the profit rate for the conventional Sukuk tranche?
A5. The conventional Sukuk tranche has a profit rate of 5.225% per annum.
Q6. How many green Sukuk tranches has SEC issued under its Green Sukuk Framework?
A6. This is SEC’s fourth green Sukuk tranche under its Green Sukuk Framework.
Q7. What will the proceeds from the green tranche be used for?
A7. Proceeds will finance or refinance eligible green projects in renewables and energy efficiency.
Q8. How much has SEC raised through green Sukuks since 2020?
A8. Since 2020, SEC has raised a total of $3.75 billion through green Sukuks.
Q9. What is SEC’s net-zero ambition timeline?
A9. SEC aims to achieve net-zero emissions by 2050.
Q10. What was the total demand for the Sukuk offering?
A10. The order book exceeded $12 billion, representing an oversubscription of 4.3 times.
Q11. Which regions showed strong investor interest?
A11. Strong investor interest came from Asia, Europe, and the Middle East.
Q12. What are SEC’s credit ratings from major agencies?
A12. Moody’s rates SEC Aa3 (stable), Fitch rates A+ (stable), and S&P rates A (positive).
Q13. Who is the Acting CEO of Saudi Electricity Company?
A13. The Acting CEO is Eng. Khaled Al-Ghamdi.
Q14. How does this issuance support Vision 2030?
A14. It supports energy sector transformation, renewable integration, and sustainability goals under Vision 2030.
Q15. What type of Sukuk is this offering?
A15. It is a senior unsecured RegS Sukuk under SEC’s international Sukuk Programme.
Q16. When did SEC hold the virtual investor roadshow?
A16. The virtual roadshow was held on February 10, 2025.
Q17. What is the significance of the oversubscription?
A17. The 4.3 times oversubscription reflects strong investor confidence in SEC’s creditworthiness and strategy.
Q18. What are some eligible green projects for the green tranche?
A18. Eligible projects include renewables and energy efficiency initiatives.
Q19. How does SEC plan to use proceeds from the conventional tranche?
A19. The conventional tranche proceeds will support general corporate purposes, including grid infrastructure and digitalization.
Q20. What ESG objective does this Sukuk align with?
A20. It aligns with SEC’s ESG strategic objective of advancing Saudi Arabia’s energy transition in line with Vision 2030.
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