JEDDAH, (Reuters) – Saudi Electricity Company (SEC) signed on Wednesday a 12-year loan for $989.1 million with a group of international banks to finance an expansion in one of its projects, the firm said in a bourse statement.

The banks include HSBC, Bank of Tokyo-Mitsubishi, City Bank, Deutsche Bank, and Sumitomo Mitsui Financial Group.

The loan will be used to buy equipment from French engineering group Alstom to expand its Shuaiba 3 project on the Red Sea coast, the statement said.

The Shuaiba 3 project is expected to add an additional 1,200 megawatts after the project is complete, it said.

Saudi Arabia, which sits on the world’s biggest oil reserves, is struggling to keep up with rising power demand, which is rising 7 to 8 percent annually, amid rapid population growth.

SEC, which is 81 percent-owned by the government, has projects to add 1,826 megawatts in 2011 and will add 12,752 megawatts of power from 2012 to 2016.

The firm, which has a current installed capacity of 50,000 megawatts, plans to boost capacity to at least 80,000 megawatts by 2020 and has started to implement a number of independent power producer (IPP) projects.

SEC said in June 14 that it will use a $13.63 billion loan to finance 70 percent of its projects.

Shares at Saudi Electricity closed at 13.7 riyals by the end of trading on Tuesday.