The Gulf Cooperation Council Interconnection Authority (GCCIA) plans to invest up to $1.3 billion in network expansion from 2025 to 2027, which will pressure its credit metrics as all projects are fully debt funded, according to S&P Global Ratings.

“Over 2024-2027, we expect GCCIA to invest at least $1.1-$1.3 billion to expand the network and up to $1.5 billion should the funding for the backbone expansion project be secured,” Emeline Vinot, Associate at S&P Global Ratings, said.

This investment programme will be fully debt funded with financing expected to come from local development banks, including of Kuwait, Qatar, and the UAE, she added.

In addition, GCCIA expects a negative free operating cash flow of about $500 million in 2025, decreasing to be free cash flow neutral from 2027.


“As a result, we currently expect net debt to peak at about $800 million-$850 million in 2026-2027, decreasing to about $600 million by 2029,” Vinot said.

GCCIA is the interconnector for the Gulf Cooperation Council (GCC) member countries, ensuring the security of electricity supply in the region. Over the past 15 years, it has supported national electricity transmission networks for more than 2,000 emergency cases.

S&P has assigned an ‘A’ issuer credit rating to GCCIA, expecting it to receive timely support from the GCC states, which will drive the expansion of its existing network.

“We view the GCC countries extremely likely to support GCCIA in case of distress, notably its biggest shareholder Saudi Arabia,” Vinot stated.

(Editing by Seban Scaria seban.scaria@lseg.com)