AS&H in co-operation with Clifford Chance advises on Saudi Electricity Company’s SAR 167.92 billion (approx. USD45 billion) Shari'a compliant subordinated perpetual financial equity-like instrument as part of Saudi Arabia’s wider electricity reforms

Abuhimed Alsheikh Alhagbani Law Firm (AS&H) in co-operation with Clifford Chance advised the Saudi Electricity Company (SEC) (the Company) on the conversion of the Company’s financial government liabilities into a SAR 167.92 billion (approx. USD 45 billion) Shari'a compliant subordinated financial equity-like instrument with a redemption option as part of wider electricity sector regulatory reforms in Saudi Arabia.

The financial agreement between the Company and the Government represented by the Ministry of Finance is part of a series of other electricity sector reforms including regulatory and structural. This financial transaction is considered the world's largest Shari’a compliant transaction ever to be executed.

The financial agreement and reforms will put SEC in a better financial position to meet all its financial obligations and will create a more sustainable capital structure for the company. SEC is the largest electricity company in the MENA region and plays a crucial role in helping meet the growing demand for electricity in Saudi Arabia.

The joint AS&H and Clifford Chance team was led by AS&H Partner and Head of Banking & Finance Yasser Al-Hussain and Clifford Chance Partner and Global Head of Islamic Finance, Qudeer Latif.

Yasser comments “We are extremely pleased to have supported SEC on this agreement. This is testament to the expertise as well as strength and depth of our practice which sees it advising on some of the most innovative and ground-breaking transactions in the Kingdom.”

Qudeer comments "We are delighted to have supported SEC on this transformative financial agreement. The financial agreement is key to enable SEC to move forward with an improved financial position to be able to meet growing demand for electricity in the Kingdom."

The team comprised Ahmed Choudhry (Counsel), Mazin Al-Zamil and Abdulkhaliq Elshayyal (Senior Associates) and Abdullah Alsugair (Associate).