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Saudi Electricity Company announces receiving a letter approving regulated weighted average cost of capital (WACC) of 6.65% on its regulated asset base for the current regulatory period starting from 2024 to 2026
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| Announcement Detail | Saudi Electricity Company (SEC) announces that it has received a letter from His Royal Highness the Minister of Energy and the Chairman of the Ministerial Committee for the Restructuring of the Electricity Sector and SEC dated 20/10/1445 H (which corresponds to 29/04/2024), approves a regulated weighted average cost of capital (WACC) of 6.65% on the regulated asset base of SEC for the current regulatory period, spanning from 2024 to 2026. This is compared to 6% regulated WACC for the previous regulatory period from 2021 to 2023. This decision is anticipated to positively impact SEC revenues throughout the current regulatory period due to the increase in the regulated return compared to the previous regulatory period, coupled with the growth of the regulated asset base, which supports the Company's financial sustainability, its future growth prospects and enhancing its capacity to deliver electricity service with high levels of efficiency and reliability. In accordance with the abovementioned decision, and under the terms of the Mudaraba Agreement signed on 15/11/2020 between the company and the Government, represented by the Ministry of Finance, where the annual profit margin of the Mudaraba instrument is linked to the regulated WACC on the regulated asset base, the annual profit margin for the Mudaraba instrument during the current regulatory period is set to be 5.15%. |
The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.
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