Sembcorp energises China business with coal-fired power project in Chongqing

The plant will commence operations in 2017.

The utilities conglomerate has further deepened its footprint in China as it injects $202m of equity into a 1,620MW coal-fired power project in Chongqing, China.

According to RHB Research, it holds 49% of the joint venture, with the majority share held in effect by the Chongqing Municipal Government.

RHB Research adds that the plant will utilise supercritical technology and is expected to be among the most efficient power plants in Chongqing.

“Its efficient technology, combined with ideal location next to its primary coal input and the impending reform of Chongqing’s power market to allow power generation suppliers to retail electricity directly to qualified power consumers should mean that these plants will enjoy a high proportion of generation uptime in the foreseeable future,” RHB Research said.

Meanwhile, RHB Research says the JV would serve as a near-term boost for Sembcorp, as it is scheduled to be completed earlier than the company’s previous contracts with due dates of 2018 or later.

“The 300MW power plant is already in operation and the 50%-complete 1,320MW power plant should begin contributions by 1Q17. The total investment value will be c.CNY6bn (c.SGD1.3bn), for which Sembcorp will finance its half by a combination of equity and on-shore long-term financing,” RHB Research said.