Saudi Electricity Company gains regulatory approval for increased weighted average cost of capital – Saudi Gazette

Saudi Electricity Company gains regulatory approval for increased weighted average cost of capital – Saudi Gazette

The Saudi Electricity Company (SEC) has received approval for a new regulated weighted average cost of capital (WACC) of 6.65% for the regulatory period 2024-2026. This marks an increase from the previous 6% WACC, covering the period from 2021 to 2023. The approval was granted by the Minister of Energy, who is also the Chairman of the Ministerial Committee for the Restructuring of the Electricity Sector and SEC.This upward adjustment in WACC reflects an anticipated positive impact on SEC's revenues due to the growth of the regulated asset base and supports the company's financial sustainability and future growth prospects. This will enhance SEC's ability to deliver electricity services with high levels of efficiency and reliability. Additionally, the Mudaraba Agreement with the government ensures that the annual profit margin for the Mudaraba instrument will be set at 5.15% during this period.Eng. Khalid bin Hamad Al-Gnoon, CEO of SEC, commented on the regulatory approval, stating that it is guided by a dynamic regulatory framework which incentivizes operational efficiency and enhances customer service quality and reliability. He emphasized that the strategic investment plans of SEC are underpinned by robust regulatory and financial principles, aligning with international best practices to support the sustainable development