BUSINESS OPPORTUNITIES

IN SAUDI POWER SECTOR

U.S. – Saudi Business Opportunities

Forum 5-7 December 2011 Atlanta-U.S.A

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Electricity Industry in Saudi Arabia

Starts in the 50`s 100% private utilities .

Late 70`S consolidated into four major regional power

companies (SCECO).

In 2000 All operating entities merged in one company

Saudi Electricity Company (SEC).

SEC owns 85% of generation and 100% of transmission

and distribution.

The government involved as shareholder and regulator .

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Largest electricity system in the region.

Assets exceeds US$70 billions.

Over 52,000 MW installed capacity.

48,000 MW peak demand and 250MMWH.

160,000 Miles of transmission& distribution lines

Serving 6 million customers .

Revenues 8.5 US$ bln with 7-8% annual growth .

SAUDI power sector TODAY

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DATANo of customer

( Million)Peak load

(MW)Available

generation (MW)Transmission

(KM)Energy (GWH)

2001 3.6 23000 24000 30000 114000

2011 6.2 47000 52000 48000 240000

Growth)%( 72% 105% 102% 65% 101%

GROWTH (2001 – 2011)

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High growth in demand ( will continue 7- 8%).

High growth in fuel consumption.

Low tariff for domestic (2.2 US cents/kwh) .

Low average load factor (55%) seasonal.

Inefficient old of generating units.

High capital- investment.

CHALLENGES

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Replace all inefficient generating units.

Build more capacity and more interconnection.

Promote energy conservation initiatives.

Load management programs (time of use tariff).

Introduce smart grid and smart systems .

Encourage and support renewable energy.

OpportunitiesOpportunities

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RECORDED & FORECASTED LOADS RECORDED & FORECASTED LOADS

MW

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Over the next 10 years:

Generation expansion US$ 40 billions

Transmission expansion US$ 24 billions

Distribution expansion US$ 16 billions

Total capital investment US$ 80 billions

FUTURE CAPITAL INVESTMENT

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Year Project name Capacity (MW) Date in Service

Jeddah South PP (EPC) steam 2,600 2015

Rabigh 2 PP( IPP) steam 1,200 2015

Dheba PP (IPP) ccpp+steam 1,800 2015

Gizan pp (EPC) steam 2,600 2016 Ras Alkhair pp (IPP) 2,600 2016Al-Shogaig 2 PP (? ) 1,200 2017Duba 2 PP ( ? ) 800 2017

2015 Alogair PP 2,600 2018Ras Abigamis 2,600 2019

Total investment US$40 billions

maj or Futur e Gener ation pr oj ects

2012

2013

2014

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Private power production is a partnership .

SEC partnership 20-50 % .

Long term power -off take-purchase agreement.

SEC provides the land and fuel .

30- 40% of future generation will be IPP .

20/80 equity/debt ratio.

Ipp programIpp program

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SUCCESSFUL IPP PROJECTS

SUCCESSFUL IPP PROJECTS Three IPP Projects under development:

1. Rabigh Power Plant (Awarded July2009)• 1200 MW / HFO• INVESTMENT US$ 2.5 billion• IRR > 8.45%

2. Riyadh Power Plant 11 (Awarded July 2010)• 1800 MW / CCPP/GAS• INVESTMENT US$2.1billion• IRR > 6%

3. Gorayah IPP (Awarded Sep. 2011)• 4000 MW / CCPP /GAS• INVESTMENT US$ 3.5 billion• IRR > 7.5%

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KINGDOM’S INTERCONNECTION STRATEGIC PLANKINGDOM’S INTERCONNECTION STRATEGIC PLAN

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Year Project Length Miles Date in Service

BISHA_DAWASIR +2 substations 320 20155th 380 KV LINE TO CENTRAK 250 2015MADINAH-HAIL 230 2015RIYADH-JEDDAH DC line 500 2016TABUK-TABARGAL +2Substations 380 2016WEST _SOUTH 2ND LINE 320 2016

2014 MADINAH-TABUK DC Line 380 2017

Futur e 380KV tr ansmission l ines pr oj ects

2012

2013

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Year Project Length Miles Date in Service

Tabuk-Tabarjal +Substations 200 2017Umluj-Wadjh +Substations 250 2017South-West 2nd line 300 2018Jouf-Tabarjal 100 2018

2015 Al-grayat- Tabarjal 160 2019

capital cost US$25 Bln

2014

2014

Future 380KV transmission /contd..

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BUSINESS OPPORTUNITIES

As an EPC contractor.

Material and Equipment supply.

Local manufacturing and services.

Participate in IPP projects .

Opportunity in engineering services.

Invest in new and renewable energy.

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High growth in demand will continue 6-7%. 75-80 billion US$ for capital investment. Good opportunities for U.S. companies. Investors have the opportunity .

Yes, Big challenge, But great opportunities !!!

conclusion

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For more information you can visit Saudi Electricity Company web page at :

www.se.com.sa

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Generation Capacity generation capacity installed should meet the expected

7% increase in peak demand and a reserve margin.

2006

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2009

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2010

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2011

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2012

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2013

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2014

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2015

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2016

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2017

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2018

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2019

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2020

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2021

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2022

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2023

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0

10000

20000

30000

40000

50000

60000

70000

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100000

41

59

7490

SEC Installed & new capacity IWPP Installed capacity IPP Installed capacity

SWCC Installed capacity Peak Load total capacity

Generation capacity )GW(

8