JAKS Resources Bhd has secured US$1.402 billion in financing to partly fund the construction of a coal-fired thermal power plant project (IPP project) in Hai Duong province, Vietnam.
The thermal plant has a project cost of US$1.87 billion, with total engineering, procurement and construction (EPC) works amounting to US$1.52 billion (RM6.31 billion) to be executed under the two separate EPC contracts.
The agreements between its joint-venture partner, China Power Engineering Consulting Group Co Ltd (CPECC), and the principal financiers, Industrial and Commercial Bank of China, China Construction Bank Corporation and Export-Import Bank of China, fully funds the debt funding requirement.
The IPP project has an intended capital structure of about 75% debt and 25% equity.
Under the financing arrangement, JAKS’ wholly-owned subsidiary that is undertaking the project, JAKS Hai Duong Power Co, entered into the shareholders’ loan facility agreement with CPECC’s wholly-owned subsidiary, China Power Engineering Consulting Group (Hong Kong) Investment Co, to accept a term loan of not more than US$1.402 billion, representing 75% of the total project cost of the IPP project.
On Sept 15, 2015, JAKS received approval from shareholders at an EGM to proceed with the proposed 50:50 joint venture agreement between group and CPECC to invest in the 25-year build-operate-transfer 2x600MW IPP project in Vietnam.
“This is another key milestone for JAKS. With the passing of shareholders’ resolution and signing of loan agreements, we will be able to formalise financial close for the IPP project before the end of October 2015,” JAKS’ CEO Andy Ang Lam Poah said.