1MDB seeks partners for 2,000 MW Project 3B

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1MDB seeks partners for 2,000 MW Project 3B

Jimah East Power Sdn Bhd, a joint venture (JV) between 1Malaysia Development Berhad (1MDB) and Mitsui & Co Ltd, is seeking partners to develop Project 3B, a 2000 MW coal-fired power plant in Negeri Sembilan, Malaysia.

The total project investment is estimated at RM11 billion (US$2,983 million). The project is expected to be funded with debt of RM8.4 billion raised from a sukuk (bonds) issue and an equity portion of RM2.9 billion. 1MDB holds 70% stake in the project while Mitsui & Co Ltd hols the remaining 30%.

According to the Energy, Green Technology and Water Ministry, the potential delay in the project could be cause due to the company’s liquidity issues. 1MDB might be having problems raising funds for the project. In addition the instability of the exchange rate and interest rate has reduced project returns.

The project involves the design, build, own, operate and maintain the coal-fired electricity generating facility dubbed Track 3B with a total nominal capacity of 2,000MW to be located at Jimah in Port Dickson.

On 24 July 2014 we reported that Tenaga Nasional Bhd (TNB), the largest Electric utility company in Malaysia, signed a power purchase agreement (PPA) with Jimah East Power Sdn Bhd. The contract governs the obligations of the parties to sell and purchase the daily available capacity, and to the extent despatched, the net electrical output generated by the facility. Tenaga did not disclose the value of the deal or the price to be paid for the power.  The PPA is for a period of 25 years.

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