Pestech and SDEE to team up in Cambodian power projects

KUALA LUMPUR: Pestech International Bhd is teaming up with a subsidiary of State Grid Corp of China in projects to develop the power infrastructure market in Cambodia.

In a filing with Bursa Malaysia, the company said it had signed a memorandum of understanding (MoU) on Thursday with Shandong Electrical Engineering & Equipment Group (SDEE) to assist Electricite du Cambodge to enhance and upgrade the condition of its national grid operation and maintenance.

At the same time, they will improve its efficiency and reduce the transmission lost.

Pestech and SDEE will set up jointly a distribution transformers manufacturing plant in Cambodia. They will also become equity partners of a special-purpose vehicle company to undertake procurement of power transmission agreement/power systems infrastructure concession projects.

“Pestech’s primary role would be on the project execution and construction, while SDEE’s primary role will be on the provision of necessary funding and supplying of relevant equipment, where possible,” Pestech said.

Pestech said it and SDEE would start discussions and form definitive collaboration agreement within a period of 12 months or such further period(s) as may be mutually agreed on by the parties to determine detailed terms and conditions for the joint development arrangement (JDA).

The MoU will have no material effect on the group’s earnings, revenue and net assets per share for the financial year ending June 30, 2016. It is, however, expected to contribute positively to the group’s future earnings should the JDA materialise.

In April, Pestech’s 60%-owned subsidiary Diamond Power Ltd had signed an agreement with Cambodia’s Mines and Energy Ministry and state-owned Electricite Du Cambodge to transfer to it the ownership of the 230kV Kampong Cham – Kratie Transmission System project.

Pestech said it expected the project development to cost US$92.21mil (RM352.9mil).

Pestech shares fell 2 sen to close at RM5.87 on Thursday. 

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