Sembcorp Industries (Sembcorp) has formed a joint venture with Chongqing Energy Investment Group to invest in a 1,620-megawatt (MW) coal-fired power project in Chongqing, in Southwest China.
Sembcorp holds a 49 percent stake in ChongQing Songzao Sembcorp Electric Power, as the tie-up is dubbed, while Chongqing Songzao Coal and Power, a subsidiary of Chongqing Energy Investment Group, holds the remaining share.
Sembcorp has paid about CNY925 million (€130 million; $141 million) for its equity stake, an amount it said is being financed by internal funds.
The joint venture now operates an existing 300MW coal-fired power plant. It is also building an adjacent 1,320MW coal-fired facility in Qijiang District, Anwen Town, the construction of which is currently more than 50 percent completed.
Expected to become operational in the first quarter of 2017, the project has a total investment cost estimated at CNY6 billion. The funding is being covered by a combination of equity and long-term onshore financing.
The project, which is the only mine-mouth coal-fired power plants in the region, is one of the largest backed by Sembcorp’s energy unit in China.
The company currently has 2,757MW of power capacity in operation and under development in the country. Its portfolio includes as a gas-fired power plant in Shanghai as well as wind power plants in Inner Mongolia and Hebei.
Temasek, the Singaporean sovereign wealth fund, owns 49.5 percent of Sembcorp. Focused on energy, water and marine projects, the Singapore-listed company has total assets of more than S$19 billion (€12.2 billion; $13.3 billion), according to its website.
Owned by the Chongqing Municipal Government, Chongqing Energy Investment Group is the largest power generation business in the region.