KUALA LUMPUR, July 10 Malaysia's Genting Bhd's unit has won the bid to develop a $1 billion worth of 660 MegaWatt (MW) coal-fired power plant in Banten province in the West Java of Indonesia, the parent company said on Tuesday.
The project marks the gaming-to-power conglomerate's maiden investment in the Indonesia growing power sector, which is fuelled by rapid urbanisation of Southeast Asia's largest population.
"The project is expected to contribute positively towards the future earnings of Genting after the Banten plant achieves commercial operations in 2017," the company said in a local stock exchange filing.
Genting said its Indonesian unit PT Lestari Banten Energi signed on Tuesday the 25-year power purchase agreement with Indonesia's state-owned electricity company PT PLN.
The Banten plant will be developed and operated on a build, own, operate and transfer basis for a period of 25 years, following which, it will be transferred to PLN for nominal consideration, Genting added.
Genting's indirect wholly-owned unit Lestari Listrick Pte Ltd owns 95 percent stake of Lestari, while PT Hero Inti Pratama, whose holding company is the founding shareholder of Indonesia's listed PT Hero Supermarket Tbk, owns the balance.
Up to 75 percent of the $1 billion cost will be funded via non-recourse debt by Lestari with the remaining through equity injections or loans from its shareholders, according to Genting.
Genting said it will finance its portion through its or its subsidiaries' internal funds and proceeds raised from its bond issuance in June. (Reporting By Yantoultra Ngui; editing by James Jukwey)