to download the complete report - GulfBase.com

Energy and UtilitiesPrivatizing is the key to growthElectricity consumption in KSA has increased rapidly in recent years driven by a robustindustrial sector, growing population, and improvement in living standards. Moreover, lowertariffs fixed by the Government, hot weather conditions, and a surge in power-intensiveindustrial development also supported demand growth. KSA’s energy and utilities sectorcurrently has only two listed companies — Saudi Electricity Company (SECO) and National Gasand Industrialization Co. (NGIC). Both companies are part-owned by the Government. Apartfrom these two companies, there are few other state bodies that contribute to electricitygeneration. These include Saline Water Conversion Corporation (SWCC), Marafiq, and SaudiAramco. In addition, Tihama Power Generation Co. (a private entity owed by Saudi Oger Ltd.and International Power Plc), owns four plants.Electricity consumption percapita is expected to grow at4.1% over 2007-12, accordingto EIUElectricity consumption in the Kingdom increased at a 3.0% CAGR from 6,214 Kilowatt hour(kwh) per head in 2003 to 6,994 kwh per head in 2007. The EIU expects electricity consumptionin the Kingdom to increase to 8,556 kwh per head in 2012 (CAGR of 4.1% during 2007-12),backed by growth in the country’s industrial sectors and population.Exhibit 74: Per capita electricity consumption in Kwh, 2007A–2012E9,0008,4008,5567,8007,9398,2347,2007,3497,6466,6006,9946,0002007 2008 2009 2010 2011 2012Source: EIU (report dated 29 August 2008)GCC countries are expected tospend almost USD217 bn onelectricity projects, of whichalmost 80% will be spent byKSA and the UAEA similar trend is visible across the GCC countries. To cater to growing demand, GCC countriesare targeting to expand installed capacity to 96,700 MW by 2010 from 59,700 MW in 2006.They are also enhancing the electricity transmission network that includes the setting up of GCCInterconnection Grids across the GCC to benefit from differences in peak electricity demand.The first phase of this grid is expected to commence operations in 2Q-09 and would link KSA,Kuwait, Qatar and Bahrain while the second phase will link UAE and Oman. Total spending onthe electricity projects is expected to aggregate USD217bn, of which approximately 80% is likelyto be spent by KSA and the UAE (Exhibit 75).JUNE 2009SAUDI ARABIA FACTBOOK56