The Gulf Cooperation Council Interconnection Authority (GCCIA) has announced plans to invest up to $1.3 billion in network expansion between 2025 and 2027. This significant investment is expected to impact the authority’s credit metrics, as all projects will be financed through debt, according to S&P Global Ratings.

S&P Global Ratings anticipates that GCCIA will invest at least $1.1 billion to $1.3 billion during this period, with potential funding reaching up to $1.5 billion if resources for the backbone expansion project are secured. Emeline Vinot, an Associate at S&P Global Ratings, indicated that the financing would primarily come from local development banks in Kuwait, Qatar, and the UAE.

Furthermore, GCCIA is projected to experience a negative free operating cash flow of approximately $500 million in 2025, with expectations of reaching free cash flow neutrality by 2027. Vinot noted that net debt is expected to peak at around $800 million to $850 million in 2026-2027, before decreasing to about $600 million by 2029.

GCCIA plays a crucial role in ensuring the security of electricity supply among Gulf Cooperation Council (GCC) member countries and has supported national electricity transmission networks during more than 2,000 emergency cases over the past 15 years. S&P has assigned an ‘A’ issuer credit rating to the authority, reflecting its expectation of timely support from GCC states, particularly from its largest shareholder, Saudi Arabia. Vinot emphasized the likelihood of support from GCC countries in the event of distress.