Développement du Financement de Projet et de la Privatisation dans la Péninsule Arabe

Saudi Arabia : a step front, two steps behind !

The electric developers of projects constantly scan the efforts made laboriously by Saudi Arabia (KSA) to reform the sector in question. The country presents great potentialities for the blooming of the IP : it is estimated that, if KSA wishes not to be overflowed by the increase in the electric request in the country, its need for investment on the matter will reach the 117 billion dollars in the twenty years to come. This represents an increase in the working installed capacity of the order 50.000 Megawatts. The electric policy of KSA is far from being as well defined as that of Abou Dhabi, but it does not present of it less the budding of the same strategy :

1. separation of the goods of the State between generation, transmission and distribution

2. adherence with the concept of the government as an exclusive purchaser.

However, certain events which proceeded into 2000 bring to wonder about the sincerity of the Saoudi government (monarchy « lit » ?) in its search of privatization and reform. Indeed, the will of the government appeared to weaken when in October 2000 it succumbed to pressures of the public by cancelling increases in tariff decided by Saudi Electricity Company (SEC) in April. However, this increase in tariff had been decided in order to make it possible future the IP to function with a rate of return reasonable and this without guaranteed governmental subsidies nor dividends.

Moreover, legal environment and « operational » Saoudi is underdeveloped, while at the same time the government feels reluctant to provide guarantees, which presents obstacles more than significant at the development of the privatization of the sector of electricity. The factory of Shuaiba, for example, of a cost of 2,2 billion dollars, owed at the origin being a IP. But the private investors were not interested in it, precisely because of their doubts about the stability of the tariffs and the applicable legal status. Consequently, the project was financed by the government on an Islamic basis provided by Al-Rajhi Banking and Investment Corporation.

In spite of that, KSA continues to push new diagrams of financing for its electric projects. For example, station PP9 (1200MW) in the north of Riyadh was financed by excesses of incomes taken on the large-scale consumers since 1995. The factory Ghazlan II (2400 MW) is financed through a loan of 500 million dollars, trade unionist to the international one, and who gives to his transmitters the right to refund himself if need be on request starting from the incomes of prestigious customers such as Saudi Aramco. Another test tried by KSA to show its sincerity lay in the project of a IP « captive » of 320 MW that Saudi Petrochemical Company envisaged to create to satisfy its own needs. Americans ENRON and CMS Energy had been selected like foreign partners... The scandalous bankruptcy of the first, the failure and the withdrawal of the second, and finally the events of September 11, 2001, were to strike of a fatal blow this attempt, with the remainder not very convincing.

The financial organizations remain in active day before. But nothing will be possible as long as the Saoudi government will not have shown its political capacity to impose not subsidized tariffs and tallies legal and operational transparency. This, without forgetting that the question of the development of the gas fields, necessary to the electrical power, remains outstanding, whereas it is probably the only reason which brings them « large »^17(*) with still considering the subject in Saudi Arabia.

* ¹⁷ Exxon Mobil, Shell, TotalFinaElf, etc