Government-owned electric utility is largest in the Middle East, providing power to more than 3.5 million customers
Cambridge, Mass., April 3, 2001 The Kingdom of Saudi Arabia has awarded a multi-million, multi-phased contract to the consulting firm Arthur D. Little, Inc. to advise on the restructuring and commercialization of its electric utility, which is the largest in the Middle East.
Saudi Electricity Company (SEC) is Saudi Arabia’s electric utility with majority shares held by the government itself. The utility is the largest in the Middle East, providing power to more than 3 1/2 million customers representing more than 80% of the population. The utility has 20,000 megawatts of generating capacity, more than 17,000 kilometers of transmission lines and 200,000 kilometers of distribution lines.
The first phase of the contract, signed last week by the Saudi Government and Arthur D. Little, is for $2 million and will entail the development of a strategic plan for the restructuring. Once complete, the plan will be reviewed by the Saudi Government and, if approved, a second, $4 million implementation phase will commence in the fall. “Due to its size, this multi-phased project is the most ambitious restructuring initiative in our region,” said Tariq A. Al-Betairi, a member of the executive committee of the Saudi Electricity Company.
“We needed someone to develop a plan that will lead us down the most efficient and profitable path to a fully commercialized electricity sector. Because of its track records and local knowledge, Arthur D. Little was chosen to undertake the assignment. The firm has outstanding experience in the utilities industry and an excellent reputation as business strategists and financial analysts. I am sure that their talents will be put to good use here.”
Investments in the Kingdom’s energy industry infrastructure would not only bolster its energy supply but would also help diversify and sustain its burgeoning economy. Saudi Arabia hopes commercialization of its electric utility will attract foreign energy companies into the newly structured market, bringing billions of dollars of investment in new power facilities.
The Saudi government’s goal is to attract $100 billion in foreign investments in the electricity sectors during the next 20 years. During the next four months, a team from ADL will work with officials from the Saudi Electricity Company to develop a master plan for the restructuring process.
“What we’ve been asked to develop is a Strategic Master Plan for the entire electricity sector, from the potential unbundling of functions such as generation, transmission and distribution through the management of the new Saudi Electricity Company,” said Charles Parry, ADL Project Director. “They need us to create a vision for the industry then generate a roadmap to get them there.”
About Arthur D. Little Arthur D. Little (www.adl.com) is the world’s premier consulting firm working at the interface of business and the technologies that drive innovation and growth. Drawing on its unique blend of knowledge and hands-on experience in a broad range of industries worldwide, the firm works with its clients to help them create breakthrough innovations in practices, products, and processes to drive growth and the creation of new value.