Saudi Electricity Co (SEC) has signed a $366 million loan agreement with the Japan Bank for International Cooperation (JBIC) and two Japanese banks to help finance the construction of a 2,650 megawatt (MW) power plant in Jeddah.

The facility, funded by Bank of Tokyo-Mitsubishi UFJ and Mizuho Financial Group, is part of a wider $2 billion finance package for the Jeddah South project, according to a SEC bourse filing on Wednesday.

The remaining $1.634 billion, to be completed through a facility provided by South Korea, will be signed later this week, the statement said, without elaborating further.

The Japanese-backed financing, which comes with a guarantee from export credit agencies Nippon Export and Investment Insurance (NEXI) and JBIC, has a 12-year lifespan after a 3-year grace period starting Dec. 18 this year, SEC said.

South Korean group Hyundai Heavy Industries (HHI) is building the new oil-fired power plant, while Mitsubishi Heavy Industries will supply equipment for the plant, which is expected to be completed in 2016.

Jeddah South is just one of the power plants currently being developed by SEC, with the monopoly utility spending billions of dollars to increase generation capacity in a country where demand is growing by around 9 percent per annum.

Last month, a consortium led by ACWA Power signed a power purchase agreement with SEC to finance, build and operate the 2,060 MW Rabigh 2 power plant on the west coast of the kingdom - a project due to cost around $1.36 billion.

SEC's outgoing Chief Executive, Ali bin Saleh al-Barrak, also said in November it planned to raise capacity at its Qassim oil-fired plant by around 360 MW over the next three years, having only recently upgraded it to produce 1,700 MW.

Meanwhile, SEC signed a contract in August with HHI to build the 2,640 MW Shuqaiq power plant, expected to cost $3.2 billion. – Reuters