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SINGAPORE: Sembcorp Industries announced on Monday that it has signed a contract for a US$1 billion water and power project in Oman.
It has embarked on a joint venture called Sembcorp Salalah Power and Water Company, formed between its fully-owned subsidiary Sembcorp Utilities and the Oman Investment Corporation.
Sembcorp Salalah Power and Water Company is 60 per cent owned by Sembcorp Utilities and 40 per cent owned by the Oman Investment Corporation.
The joint venture firm will execute a 15-year contract to supply power and water to the Oman Power and Water Procurement Company.
It will invest some US$1 billion to develop, build, own and operate the Salalah Independent Water and Power Plant in Oman.
Targeted to begin full commercial operations in the first half of 2012, the facility will consist of a gas-fired power plant and a seawater desalination plant.
The entire electricity and water output from the facility will be sold under the 15-year power and water purchase agreement.
Sembcorp's participation in the project follows a competitive bidding process, which involved other global utilities companies.
It said the project cost of about US$1 billion will be 75 per cent funded through 17-year non-recourse project finance loans, and 25 per cent by shareholder loans.
The contract is not expected to have a material impact on its earnings for the current financial year.
- 938LIVE/so
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