SINGAPORE - Sembcorp Industries will invest US$68 million (S$97 million) to build a 426-megawatt power plant in the northwestern district of Sirajganj in Bangladesh.
This build-own-operate project is Sembcorp's first in the fast-growing emerging market, said the engineering conglomerate in a press statement on Monday.
The power plant project, at a total cost of US$390 million (S$557 million), was awarded to Sembcorp's wholly-owned subsidiary, Sembcorp Utilities, by the Government of Bangladesh.
The plant will be fuelled primarily by natural gas, with high speed diesel as backup fuel.
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 remaining 29 per cent.
A joint venture company, Sembcorp Sirajganj Power Company, will be incorporated in Bangladesh to undertake the project.
"Bangladesh offers strong growth potential and we see the opportunity for us to further grow our utilities and other businesses in the country," said Sembcorp chief executive Tang Kin Fei in the statement.
Mr A.M. Khurshedul Alam, managing director of North-West Power Generation Company noted that this is the first public-private partnership project with a foreign investor in the power sector in Bangladesh.
"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.
This project is not expected to have a material impact on the earnings per share and net asset value per share of Sembcorp Industries for the financial year ending December 31, 2015, said the company.