In diversifying its business into the power sector, it will focus mainly on the Vietnamese market, with plans to expand its power generation capacity to between 5,000 and 10,000 MW over the next five to 10 years.
JAKS is a key player in the water-related industry in Malaysia. It is involved in a wide range of other businesses through its subsidiaries such as water infrastructure construction work, the manufacturing and trading of pipes and related products, general infrastructure and construction works and property development.
Venturing into the power-generating industry is part of a plan to diversify its business.
JAKS' power plant project in the Hai Duong province of Vietnam marked its first venture into that business.
The project, comprising two 600-MW units of coal-fired power plants, was projected to cost US$2bil and will be financed by equity and debt.
Construction of the project was expected to start in June 2012, with the first unit of the 600-MW plants scheduled for commercial operation in the fourth quarter of 2016 while the second unit would start producing power from the second quarter of 2017.
It would be developed under a build-operate-transfer structure and run as an independent power plant with a 25-year power purchase agreement with Vietnamese state-owned national utility Electricity of Vietnam.
The project would be fuelled by domestic coal supplied by state-owned coal company Vinacom in a 25-year agreement. At the expiry of the concession term, the project would be transferred to Vietnam's Industry and Trade Ministry.
JAKS was currently in negotiations with several parties from Asia to become a strategic investor and its joint-venture partner for its power business in Vietnam. The investor would most likely be from China and the partner would take up to 40% equity in its power business.
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