Hyflux secures letter of intent for water and power project in Egypt worth US$500m

SINGAPORE - Mainboard-listed Hyflux has secured a letter of intent for a contract by the General Authority for the Suez Canal Economic Zone (SCZone) to construct the Ain Sokhna Integrated Water and Power Project in Egypt.

The total value of the engineering, procurement and construction contract is US$500 million (about S$694 million), Hyflux is a media release on Wednesday (March 9).

The letter of intent will be followed by the signing of relevant contracts, the company said.

The desalination plant is designed to produce 150,000 cubic metres of water per day. An on-site 457 MW combined cycle gas turbine power plant will be constructed to generate power and supply electricity to the desalination plant. Excess power will be dispatched to the grid and go towards supplying the Egyptian's governorates needs.

Construction is slated to commence following finalisation of contract terms. A 25 years' operation and maintenance contract will be awarded to Hyflux for this plant.

"The entry into the Egyptian market presents exciting opportunities for Hyflux," said Ms Olivia Lum, executive chairman and group CEO of Hyflux.

"This project is significant to us because it is our first integrated water and power project abroad and demonstrates our ability to put together an innovative solution that is recognised internationally."

Hyflux said the project is expected to have a material financial impact its financial year ending Dec 31, 2016, subject to the signing of the relevant contracts.