Sembcorp Industries will invest US$68 million (S$97 million) to build a 426MW power plant in the north-west of Bangladesh.
This build-own-operate project is Sembcorp's first in the fast-growing emerging market, said the engineering conglomerate in a press statement yesterday. The plant is to be built in the Sirajganj district.
Sembcorp's wholly-owned unit, Sembcorp Utilities, clinched the US$390 million power plant project awarded by the government of Bangladesh.
The plant will be fuelled primarily by natural gas, with high-speed diesel as a backup.
Sembcorp will own a 71 per cent stake in the project while North-West Power Generation Company, a subsidiary power generation company of the Bangladesh Power Development Board, will hold the other 29 per cent.
FIRST SUCH VENTURE
Bangladesh offers strong growth potential and we see the opportunity for us to further grow our utilities and other businesses in the country.
SEMBCORP CHIEF EXECUTIVE TANG KIN FEI, on securing the project, which offers the company a platform to grow its power business in the country.
A joint-venture company, Sembcorp Sirajganj Power Company, will be incorporated in Bangladesh to undertake the project.
Sembcorp chief executive Tang Kin Fei said in its statement: "We are pleased to secure this project as it provides us with a platform to grow our power business in Bangladesh.
"Bangladesh offers strong growth potential and we see the opportunity for us to further grow our utilities and other businesses in the country," he said.
Mr A.M. Khurshedul Alam, managing director of North-West Power Generation Company, noted that this is Bangladesh's first public-private partnership project with a foreign investor in the power sector.
"Sembcorp brings with it proven capabilities in developing, owning and operating energy facilities globally.
"We believe that together we can help to meet the growing demand of electricity in Bangladesh," he said.
Sembcorp's equity investment will be financed by internal funds and borrowings.
The project is not expected to have a material impact on its earnings per share and net asset value per share for the financial year ending Dec 31, said the company.
Sembcorp Industries closed 2.83 per cent lower at $3.43 yesterday.