SINGAPORE - Sembcorp Industries has announced a memorandum of understanding with the Myanmar government to invest in and develop the country's largest gas-fired power plant to help address a power shortage.
The company said it wholly-owned subsidiary, Sembcorp Utilities, on Monday (Dec 7) signed the MOU with Myanmar's Department of Electric Power Planning (DEPP), under the Ministry of Electric Power of Myanmar (MOEP), over the project.
The US$300 million (S$420 million) 225-megawatt power plant will be built in central Myanmar near Mandalay, Sembcorp Industries said in a statement to the Singapore Exchange on Monday.
The agreement was signed by Mr Tan Cheng Guan, Sembcorp Industries' executive vice-president and head of group business development and commercial, and Mr U Khin Maung Win, DEPP director-general, in the presence of senior government officials of Myanmar.
The signing followed Sembcorp's receiving the notice of award to develop and operate the power plant in April this year.
Utilising the most efficient technologies, the plant will be able to maximise power output while minimising emissions, the company said.
When completed, the new facility will help to ease the country's severe power shortage.
The build-operate-transfer project was awarded after an international bidding process called by Myanma Electric Power Enterprise (MEPE), a division under MOEP, and advised by International Finance Corporation of the World Bank Group.
Sembcorp will have an 80 per cent stake in this project, while its partner MMID Utilities will hold the remaining 20 per cent.
Set to be completed in 2018, the project will supply power to MEPE under a 22-year power purchase agreement (PPA), with MOEP guaranteeing MEPE's obligations under the PPA.
Mr Tan said, "Sembcorp is pleased to be embarking on this project, which is our first investment in Myanmar.
"This new facility will provide a reliable source of power which is integral to the country's economic development. At the same time, it gives us a foothold to potentially develop other businesses in the country, such as water and urban development. We look forward to working closely with MOEP on this project."