Japan’s Chugoku Electric to pay US$84.3m for stake in Jimah East Power

Fund buying of Tenaga Nasional helped the KLCI jump 25 points in late afternoon trade on Monday

KUALA LUMPUR: Chugoku Electric Power is buying a 15% stake in Jimah East Power Sdn Bhd, the operator of the 2,000MW coal-fired power plant known as Project 3B, for 10 billion yen (US$84.3mil).

According to the Nikkei on Wednesday, Chugoku Electric is buying the stake from Mitsui & Co which currently owns 30% while Tenaga Nasional owns 70%.

The report said the move to buy the 15% stake was part of Chugoku Electric’s a push to grow business abroad ahead of a surge in competition at home.

“With the Malaysian facility, the central Japan utility seeks to apply its expertise in reducing carbon dioxide emissions, producing power efficiently, and other aspects of coal-fired plants. The first unit is set to begin commercial generation in 2018, and the second in 2019,” Nikkei said.

Chugoku Electric's operations abroad have largely been limited to consulting. The utility took a stake in a Chinese energy investment company back in 2009. But the Malaysian project marks its first direct investment in an overseas power facility, the report said.

In June 2015, StarBiz reported Jimah East Power may see the entry of a new shareholder after it completes its financial close.

Tenaga had then said Chugoku Electric , one of Japan’s biggest regional power utilities, might take up half of the interest in 3B Power.

This follows a prior commercial arrangement between Mitsui and Chugoku Electric Power, which Tenaga described as “a Japanese utility company that has vast experience in ultra-supercritical boilers”.

Tenaga announced then it had completed its purchase of 1Malaysia Development Bhd’s (1MDB) 70% stake in JEP for RM46.98mil, as all the conditions precedent of the share sale and purchase agreement with 1MDB for the acquisition “have been fully satisfied and complied with.”