Mitsui & Co., Ltd., through 3B Power Sdn Bhd, Mitsui's wholly owned subsidiary in Malaysia, has jointly established with Tenaga Nasional Berhad (TNB), which is the largest electric utility company in Malaysia, Jimah East Power Sdn Bhd (JEP) to build and operate a ultra super critical coal-fired power plant.
Mitsui has entered into an agreement with Chugoku Electric Power International Netherlands B.V., a wholly owned subsidiary of The Chugoku Electric Power Co., Inc., on the sale of 50% of Mitsui's share in 3B Power. Mitsui and Chugoku International signed a share purchase agreement and shareholders agreement on 20 January 2016. The share transfer will be made upon obtaining the approval from the Malaysian Government and TNB.
The project is to construct, own and operate a 2,000MW (1,000MW x 2 units) ultra super critical coal-fired power plant and sell electricity to TNB under the Power Purchase Agreement with a 25-year term.
The total project cost is expected to be approximately MYR 12 billion (circa US$2.74 billion).
JEP has engaged EPC consortium which is comprised of IHI Corporation, Toshiba Corporation, Hyundai Engineering Co., Ltd. and Hyundai Engineering & Construction Co., Ltd for the construction of the project and will be introducing high efficiency ultra super critical technology utilizing major equipment supplied by Japanese manufacturers.
In addition, JEP completed debt finance of MYR 8.98 billion (circa US$2.05 billion) in December 2015, by issuing Islamic bonds, which was the world largest issuance of Islamic bonds in 2015.
Chugoku Electric has been operating the Misumi coal-fired power plant—the first ultra-super critical coal-fired power plant in Japan—for over 17 years and therefore has outstanding know-how on coal-fired power plant operation. Mitsui and Chugoku Electric will aim for the contribution to power sector in Malaysia through collaboration with TNB as a local partner.
Mitsui has declared as a basic policy that it will pursue both new investments and shareholder return" backed by strong cash generation capabilities in its Medium-term Management Plan established and announced in May 2014.