State-controlled Saudi Electricity Co will soon award contracts to build a 2,400MW power plant.
The move follows a 15 billion riyal ($4bn) soft loan from the government, reports Reuters.
The firm has been struggling to meet pent up power demand, which grew by about 8% in 2009 in the desert kingdom, prompting King Abdullah to order in 2006 that government financial assistance be extended for the Gulf's biggest utility by market value.
The utility's chief executive, Saleh al-Barrak, said the bulk of the loan will finance the construction of a new power plant in Rabigh, on the western coast of Saudi Arabia.
"The loan will finance expansion projects for power generation and mainly Rabigh's 2,400MW power plant. Contracts for Rabigh’s plant will be awarded this year, within a few weeks," Barrak told Reuters.
The plant is expected to be completed by summer 2014.