State-controlled Saudi Electricity Company (SEC) said on Monday it finalised a murabaha Islamic financing worth SR5 billion ($1.3 billion) with four local banks to finance projects inside the kingdom.

The 15-year financing was provided by Saudi Arabia's largest lender by assets, National Commercial Bank, as well as Saudi British Bank (SABB), Samba Financial Group and Banque Saudi Fransi, the firm said in a bourse statement.

'The loan will be used to finance projects with the goal of raising power generation capacity, transport and distribution in all areas of the kingdom in order to meet the rising demand for electricity due to economic and population growth,' the statement said.

The world's biggest oil producer has seen a rise in population to over 27 million and is seeing local demand for electricity rise at about 8 per cent annually.

SEC said it used about 274,000 barrels per day for electricity production in 2009. Half the electricity production in the kingdom uses natural gas as a feedstock.-Reuters