TNB, partners sign deal to build coal-fired power plant

comments     Bernama     Published     Updated

Tenaga Nasional Bhd (TNB) has signed a shareholders agreement (SHA) with Mitsui & Co Ltd (Mitsui), 3B Power Sdn Bhd (a local company incorporated by Mitsui) and Jimah East Power Plant (JEP) for the development of 2x1000MW coal-fired power plant in Mukim Jimah (Project 3B).

The purpose of this agreement is for TNB and 3B Power to regulate both parties’ rights and obligations in JEP, it said.

JEP was incorporated by 1Malaysia Development Bhd (1MDB) and Mitsui & Co Ltd on July 5, 2013, as the special purpose vehicle company for the development of the power plant.

On July 3, TNB had entered into a Share Sale and Purchase Agreement with 1MDB for the acquisition of 70 percent stake in JEP for RM46.98 million, while Mitsui, via 3B Power, owned the remaining 30 percent equity.

Among the salient terms and conditions of SHA, TNB became the beneficial owner of JEP and its board composition shall consists of six directors, with four from TNB, and one each from 3B Power and JEP management, to be headed by an appointee of TNB.

Mitsui management said it has set a condition that their participation is solely subjected to TNB and Energy Commission’s written approval.

Chugoku Electric Power Co may take up 50 per cent equity in 3B Power after financial close.

TNB said further documents were also executed today with JEP.

The documents were Transmission Works Agreement (TWA) between TNB and JEP and Supplemental Coal Supply and Transportation Agreement (Supplemental CSTA) between JEP and TNB Fuel Services Sdn Bhd, a wholly owned subsidiary of TNB.

Under the TWA, TNB awarded JEP to upgrade and extend the PMU 275kV Olak Lempit and PMU 500/275kV Lenggeng to accommodate and facilitate additional capacity from the project 3B.

"Meanwhile, the Supplemental CSTA was to address some changes of the CSTA signed in July 22 last year," TNB said.

It said the SHA, TWA and Supplemental CSTA are not subject to the approval of TNB’s shareholders and/or any other relevant regulatory authorities.

- Bernama



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