Saudi Arabia to restructure its electricity sector

The Kingdom of Saudi Arabia is planning to transform its electricity sector, which partially relies on government subsidies, into an independent commercial sector. The country is currently working on reforms in the electricity sector, alongside procedures to develop the sector. The electricity industry will be restructured through the separation of segments and their division into several specialised companies in the fields of power generation, transmission, distribution and service provision. A new electricity tariff will be established to cover the deficit resulting from the difference between the assumed income of electricity on a commercial basis and the income from official tariff. Hikes in electricity and fuel prices will be gradually implemented to avoid the negative impact on economic growth or domestic products. Presently, the country is working to make the newly established Saudi Company for Energy Purchase Limited, implementing the purchase and sale of electricity, into an independent firm. The Ministry of Energy, Saudi Arabia, plans to raise the efficiency of the electricity sector by diversifying its energy sources and improving the efficiency of power plants in line with international standards. The country will implement around SAR 250 billion worth of power generation projects in the next five years.


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