Mitsui & Co. is to go ahead with an investment in a $1.6 billion project to build a gas-fired combined cycle power plant in Rayong Province, Thailand.

The company announced its plans after signing a project finance agreement for the 2500 MW plant, which will be built, owned and operated by a joint venture between Mitsui and Gulf Energy Development Company Limited, a major Thai private power company.

The new plant is expected to start supplying electricity in 2023 under a 25-year long term contract with the Electricity Generating Authority of Thailand. Construction of the plant will begin July 2020.

The Japan Bank for International Cooperation (JBIC) is providing project financing for approximately $208 million. The loan is co-financed by the Asian Development Bank (ADB), Export-Import Bank of Thailand (EXIM Thailand), Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank Limited, DZ Bank, the Oversea-Chinese Banking Corporation Limited and regional banks in Thailand covering approximately $1.36 billion.

Yoshio Kometani, Executive Managing Officer of Mitsui & Co., said: “We are pleased to support Thailand in answering its growing needs for electricity, together with Gulf Energy. Along with our partners JBIC and other Japanese companies, we aim to continue contributing to the development of the country's infrastructure.”

The feedstock for the plant will come from domestic natural gas and imported liquefied natural gas (LNG).

Through its investment, Mitsui aims to solve the dual challenge of demands for more energy and cleaner energy, Mitsui said.

This will be the fourth major project to be developed jointly by Mitsui and Gulf in Thailand. The partners are building a similar 2500 MW gas-fired power plant in Chonburi Province.

Mitsui will own 30 per cent of the joint venture company and Gulf 70 per cent.