Malaysia's TNB has announced a plan to buy a 2000 MW coal-fired power plant project from 1Malaysia Development Bhd (1MDB).
1MDB owns a 70 per cent stake in the 3B project, which is planned for construction near Port Dickson, Negeri Sembilan, Malaysia. The sale will help the state-owned infrastructure firm to reduce its debts.
TNB said that the 3B power plant would enhance shareholder value. "It is a greenfield power plant with good prospect and with the increased generation capacity of 2000 MW upon completion of the project, the acquisition will bring about positive value to TNB in the long run," said TNB CEO Datuk Seri Ir. Azman Mohd
"Based on financial analysis, the project is expected to have a positive impact on the earnings of TNB," Azman added. "It is not a bailout of 1MDB."
TNB's partner in the 2 x 1000 MW power plant will be Mitsui, which owns the remaining 30 per cent stake. The plant will cost an estimated $3.6 billion to build.
Mitsui and 1MDB won the rights to build the 3B power plant in February 2014. The plant was due to be completed in October 2018 but the sale of 1MDB's stake is likely to delay development.
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