A tripartite agreement was signed Wednesday between the Yemeni Ministry of Energy and Electricity, Yemeni petroleum company “PetroMasila,” and the Saudi Development and Reconstruction Program for Yemen (SDRPY).
The agreement entails SDRPY purchasing petroleum derivatives from PetroMasila to supply over 70 power generation stations across various Yemeni governorates, aiming to strengthen the capacities of Yemeni institutions, support the stability of the electricity sector and continuity of services, operate vital national facilities, and promote economic recovery and growth in Yemen.
The total volume of petroleum derivatives amounts to 339 million liters of diesel and mazut, valued at $81.2 million. The grant represents a strategic pillar, serving as an integrated support tool that enhances the efficiency of government institutions, stimulates the Yemeni economy, and positively impacts the quality of services provided to the Yemeni people by improving the reliability of electricity in hospitals, medical centers, roads, schools, airports, and ports, while also boosting economic and commercial activity.
The grant is provided under comprehensive governance to ensure that the quantities reach the final beneficiaries. A committee comprising several Yemeni entities has been formed to supervise and oversee the distribution of petroleum derivatives to power stations based on the needs submitted by electricity generation stations across the Yemeni governorates.
The effects of this grant extend across financial, economic, and service dimensions. It supports Yemeni institutions such as the Central Bank of Yemen by reducing pressure on foreign currency reserves.
At the level of the Ministry of Finance, it helps ease the financial burden on the state budget associated with fuel costs and electricity sector operations. For the Ministry of Electricity and Energy, the grant plays a central role in ensuring stable fuel supplies to power generation stations, maintaining their continuous operation, enhancing the efficiency of generation plants, and improving their operational and productive capacity.
SDRPY has previously provided petroleum derivative grants, including a $180 million grant in 2018, a $422 million grant in 2021, a $200 million grant in 2022, and the current grant for 2026.