As per the JV agreement, Sembcorp’s wholly-owned subsidiary, Sembcorp (China) will own 49% stake in the joint venture, known as ChongQing SongZao Sembcorp Electric Power. Chongqing Energy’s subsidiary will hold the remaining stake.
Sembcorp, through internal funds, has provided CNY925m ($142m) for its stake in the joint venture, which already secured approvals from the relevant Chinese authorities.
ChongQing SongZao Sembcorp Electric Power currently operates an existing 300MW coal-fired power plant. It is also developing an adjacent 1,320MW coal-fired power plant in Qijiang District, Anwen Town.
The plant is expected to feature supercritical technology and expected to be commissioned by first quarter 2017.
The two power plants are estimated to cost approximately CNY6bn ($922.6m).
In 2014, the Sembcorp signed a conditional joint venture agreement with a subsidiary of Chongqing Energy Investment Group, which is owned by the Chongqing Municipal Government, aimed to expand its energy business in China.
Sembcorp expects the location of the power plants to bring significant cost savings for the delivered coal.
In China, Sembcorp operates a gas-fired power plant in Shanghai as well as wind power plants in Inner Mongolia and Hebei.
