SAUDI ELECTRICITY COMPANY (SEC) GENERATION CONTRACTORS SUMMIT GENERATION RESTRUCTURE March 18, 2015 SAAD M. AL DEKHAYL Generation Consultant

CONTENTS SAUDI ELECTRICITY COMPANY (SEC) OVERVIEW GENERATION ORGANIZATION RESTRUCTURE

SAUDI ELECTRICITY COMPANY (SEC) OVERVIEW

SEC OVERVIEW Saudi Electricity Company (SEC) was established in the year of 2000 as part of the Country Energy Industry Restructuring with paid-up capital of SR (33.7) billion. SEC is (74%) owned by the Government, (7%) owned by Saudi Aramco, and (19%) owned by Public. SEC current total asset value is SR (277) billion, which makes it the largest in MENA and one of the largest globally. SEC is the only Electric Power Utility in the Kingdom Of Saudi Arabia covers Power Generation (50 GW), Transmission (c.60,000 Km), and Distribution (c.500,000 Km). SEC supply power to 7.1 million customers with annual growth of (6-8%) 500,000 customers/year. 49% Residential, 35% Industrial, 11% Government, 5% others.

SEC OVERVIEW SEC Peak demand for 2014 was 56,500 MW and Energy Generated was 215 TWh. SEC owns partially (7) local Generation Investment Companies (IPPs) and (IWPPs) with total capacity of (13.5 GW ). SEC Manpower Saudization (87%) of 33,000 employees. SEC present financial credit rating is (A1 / AA- / AA- ) as awarded by Standard & Poor’s, Fitch, and Moody’s.

SEC MAJOR RESPONSIBILITIES Prepare and update system development plan to meet all required demands. Generate, transmit, and distribute a reliable power supply to all costumers in the Kingdom in accordance with Saudi Power Regulations. Establish an interconnected network throughout the Kingdom to enable the optimum means of stability, reliability, and economical operation. Import and export power across the Kingdom borders.

SEC CURRENT ACTIVITIES SEC currently under restructuring process to be ready for Saudi Energy Market. SEC implementing Strategic Transformation Program (STP) to improve the work quality and achieve world class position. SEC established an Executive Leadership Development Center (ELDC). SEC working on unbundling structure and passably divesting 25% of Generation and Distribution Companies to International Power Utilities.

SEC CURRENT ACTIVITIES SEC gets support from local and international specialized entities in the fields of : Manpower Development R&D Nuclear & Renewable Energy Efficiency & Economical Operation Projects Engineering & Development O&M Environment Control Smart Grid System Operation Demand Supply Management ….etc. SEC establishing Wind and Solar Energy projects. SEC strategic plan covers participating in generation, transmission, and distribution projects outside of the kingdom.

SEC NEW ORGANIZATION

CEO INTERNAL AUDIT CORE BUSINESS SUPPORT FUNCTIONS SHARED FUNCTIONS KINGDOM FUNCTIONS

SEC PARTICIPATION IN GENERATION WITH PRIVET SECTOR COMPANY CAPACITY (MW) SEC INVESTMENT % COMPLETION DATE Morjan Electricity Company (Rabigh) 2050 50% 2017 Dhurama Electricity Company (Riyadh) 1729 2013 Hajr Electricity Copmany (Qurayh) 3927 2014 Rabigh Electricity Company 1204 20% Shuaibah (IWPP) 900 8% 2009 Shuqaiq (IWPP) 850 2010 JUBAIL (IWPP) 2745 5% TOTAL 13,405

* Include partially owned Generation SEC Compared To Other Company Country Capacity KEPCO South Korea 72 GW HERE Saudi Electricity Co. (SEC) Saudi Arabia 63.5 GW* Tokyo Electric Power Japan 63 GW E.ON* United Kingdom 61 GW Duck Energy USA 58 GW RWE Germany 52 GW ESKOM South Africa 49 GW VATTENFALL Sweden 45 GW Eletrobras Brazil 43 GW NTPC Limited India 43 GW * Include partially owned Generation

GENERATION ORGANIZATION RESTRUCTURE

GENERATION ORGANIZATION RESTRUCTURE Generation Business Line currently under restructuring process in order to be more efficient and more economical. Competition between Generation Business Units. Power Plants Distribution Criteria Installed Capacity. Technology Type. Operational Costs. Fuel Type. Average Age. Asset Value. Retirement Plan. Non Geographical Power Plants Distribution. Generation Engineering and Project Sector become part of Generation in order to enable the involvement of Generation in all stages of the Projects.

SEC GENERATION CURRENT & FUTURE POWER PLANTS UP TO 2025 Ghazlan Faras Arar Makkah Jeddah PP8 Hail Qassim PP5 PP7 Najran Tihama Baha Asir Jouf Madinah Jizan Quriyat Tabarjal Rafha Duba Tabuk Wajh Layla Shoqaiq 2 Sharourah Shoaiba PP PP12/PP13 PP10/PP14 PP4 Safaniyah Bisha Juba (Wadi Al Dawasir) Naiim Yanbu Waad Al-shamal Taif South Jeddah South Qassim North Buraidah Ras Al Khair PP15 Al Rais Rabigh PP Dammam Berri Qaissuma Shedgum Juaymah Qurayyah PP Ras Abu Qamees Uthmaniyah PP9 PP16 Duba 2 D C A B Generation Business Units Green Duba 700 MW < Capacity < 2,500 MW Capacity < 700 MW Capacity > 2,500MW Future Power Plant Power Plants In Retirement Plan

INTERCONECTED NETWORK

SEC GENERATION CURRENT & FUTURE CAPACITY BY TECHNOLOGIES UP TO 2025

SEC GENERATION CURRENT & FUTURE CAPACITY BY TECHNOLOGIES UP TO 2025

& FUTURES POWER PLANTS UP TO 2025 GENERATION BUSINESS LINE GENERATION STRUCTURE 2015 & FUTURES POWER PLANTS UP TO 2025 Without retirement GENERATION BUSINESS LINE 99311 MW 24039 MW 24961 MW 24316 MW 25995 MW Generation Unit ( A ) Al-Shuaybah Power Plant Central Power Plants Group Planning & Technical Support Finance & Business Support Madinah South (2018) Ras Abu Qamees Power Plant (2021) Generation Unit ( B ) PP16 Power Plant (2022) PP9 Ras Al Khair (2020) Southern Power Plants Group Rabigh Planning & Technical Support Finance & Business Support Generation Unit ( C ) Jeddah South power Plant (2016) Al Rais Power plant (2023) Ghazlan Power Plant Western Power Plants Group PP 10&14 (PP14 – 2017) Planning & Technical Support Finance & Business Support Generation Unit ( D ) PP15 Power Plant (2020) Al-Shoqaiq 2&3 (2017) PP 12&13 (PP13 - 2016) Qurayyah Eastern Power Plants Group Planning & Technical Support Finance & Business Support Generation Business Development Generation Planning & Regulatory Affairs Fuel Pipe lines Management Health , Safety , and Environment (HSE) Finance & Business Support Generation Operational Excellence Generation Engineering & Projects Projects Planning &Scheduling Projects Engineering &Studies Projects Execution Support Finance & Business Support Health , Safety , and Environment (HSE) Department Sector ED Division Future PP Non Eng. EVP

Health, Safety, and Environment Generation Business Unit Structure 2015 & Future Power Plants Up to 2025 ( Without retirement ) Generation Unit ( A ) 24039 MW Health, Safety, and Environment (HSE) 6,766 MW 10073 MW 3,600 MW 3600 MW Engineering & Technical Support Quality & Performance Planning Planning & Technical Support Regulatory Affairs Projects Coordination Groups Budgeting &Finance Coordination Finance & Business Support Supply Chain Coordination General Services & SLA Coordination HR Operation Maintenance Business Support Planning & Technical Services HSE Al-Shuaybah Power Plant Central Power Plants Group Business Support Planning & Technical Services HSE Hail Power plant 868 Naiim 500MW(2018) PP7 1275 MW PP8 2293 MW Juba 528 MW PP5 486 MW (2018) PP4 308 MW (2017) Layla 87 MW Madinah South Power Plant (2017) Ras Abu Qamays Power Plant (2020) Operation Operation Maintenance Maintenance Qassim &Buraydah Power plant 1928 MW Planning & Technical Services Planning & Technical Services North Al-Qassim Power plant 1800 MW (2019) Business Support Business Support HSE HSE Department Sector ED Division Future PP Non Eng. EVP

CONCLUSIONS SEC structure covers international best practices to build up the required foundations for Word Class Utility. SEC implementing Accelerated Strategic Transformation Program (ASTP) to improve work quality and achieve World Class Position. SEC structure includes Business Development Sector as one of the Core Business Lines in the Company. SEC structure includes two new Functions (Independent System Operator (ISO) and Principle Buyer) as step toward Energy Market. Generation Structure considered power plant empowerment in order to improve the responsibility and accountability at power plant level.

THANKS