Saudi Electricity readies $1 bln bond deal, say sources

State-controlled Saudi Electricity Company (SEC) plans to issue US dollar-denominated bonds soon, four sources familiar with the matter said on Tuesday.

The potential issuance would come amid a flurry of debt sales in the Gulf, including $1 billion in dual-tranche bonds sold by Saudi Basic Industries Corp (SABIC) last week.

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One of the sources said Saudi Electricity plans to sell green sukuk, or Islamic bonds, whose proceeds would be used for environment-friendly projects. In June, the company published a green sukuk framework.

Read more: Saudi Electricity Company ranks 14th largest power company globally

SEC did not immediately respond to a Reuters request for comment.

Governments and corporates in the Gulf have been increasingly tapping debt investors over the past few years to raise cash in an era of weak oil prices and low global rates.

Funding needs have intensified this year as pressure mounted on their finances following the twin shock of the COVID-19 pandemic and lower oil prices.

Last month, SEC -- the main electricity producer in Saudi Arabia with 81.1 percent indirect government ownership -- said it had signed a 9 billion riyal ($2.4 billion) syndicated Islamic loan with local banks.