SEC says WACC set at 6.65% for 2024-2026 regulated asset base

Logo of Saudi Electricity Co. (SEC)

Saudi Electricity Co. (SEC) said that the regulated weighted average cost of capital (WACC) was set at 6.65% on its regulated asset base for the current regulatory period from 2024 to 2026, compared to 6% for the previous regulatory period from 2021 to 2023.

The WACC was set by Prince Abdulaziz bin Salman, Minister of Energy, Chairman of the Ministerial Committee for Restructuring the Electricity Sector, and Chairman of SEC.

This decision is expected to boost the company's revenues throughout the current regulatory period due to the increase in the regulated return, and the regulated asset base growth. This in turn supports the company's financial sustainability, its future growth prospects, and enhances its capacity to deliver electricity service with high efficiency and reliability, SEC said in a statement to Tadawul.

It added that the annual profit margin for the Mudaraba instrument during the current regulatory period is set to be 5.15%, according to the abovementioned decision and under the terms of the Mudaraba agreement signed on Nov. 15, 2020. The annual profit margin of the Mudaraba instrument is linked to the regulated WACC on the regulated asset base.