13 July 2009 - State-run Saudi Electricity Company (SEC) has invited bidders for a SR9.5bn ($2.53bn) power plant project in Riyadh as part of efforts to meet soaring demand, a senior company official has said.

The 2000 MW combined-cycle plant project in the Saudi capital will start its first phase of operation by 2012, Amr Aswaha, head of projects for independent power projects (IPP), told Reuters.

Bidding ends in December with a decision expected in March 2010, he added, without giving details.

Saudi Electricty, the largest Gulf utility by market value, is trying to satisfy a demand for power that has soared sharply in the past two years as many infrastructure projects are underway.

Separately, SEC has signed a contract with a consortium led by Korea Electric Power Corporation (Kepco) to build the 1200 MW Rabigh fuel-oil fired power plant.

Funding for the SR9.5 billion project will be provided by a consortium of banks led by Alinma Bank which expects to contribute about $500m, said Abdulmohsen al-Fares, the bank's chief executive officer.

Other banks include Bank of China, Calyon, HSBC, National Commercial Bank, Banque Saudi Fransi, Samba Financial Group and Standard Chartered, Saudi Electricity said in a statement.

The power consortium includes Saudi's ACWA Power International and will deliver electricity to SEC under a Power Purchase Agreement (PPA) over 20 years. SEC will have 20 per cent of the project.

The plant will be built in two phases, the first of which will deliver 600 MW by 2012 while the next 600 MW will be delivered by 2013.