Sembcorp Secures 20-year Coal Supply Agreement for Its 1,320-megawatt Power Plant in India
June 26, 2013
Sembcorp Industries (Sembcorp) is pleased to announce that its joint venture in India, Thermal Powertech Corporation India (TPCIL), has signed an agreement with Mahanadi Coal Fields, a subsidiary of Coal India, for the supply of approximately 2.1 million tonnes per year of domestic coal over 20 years for its 1,320-megawatt power plant. The agreement will commence once the plant becomes operational in the second half of 2014.
Sembcorp owns a 49% stake in TPCIL through its wholly-owned subsidiary, Sembcorp Utilities, while Gayatri Energy Ventures, a wholly-owned subsidiary of Gayatri Projects, owns the other 51% in TPCIL.
The coal-fired power plant is Sembcorp’s first power project in India, located in Krishnapatnam in Andhra Pradesh’s SPSR Nellore District. In addition to this fuel supply agreement, the company has also secured a coal supply contract for one million tonnes per year of coal over 10 years with PT Bayan Resources in February 2012. Together, both contracts will supply approximately 60% of the plant’s total coal requirement. TPCIL is currently working with the relevant authorities in India to secure another fuel supply agreement for the plant by the later part of this year.
The signing of this fuel supply agreement is a significant milestone for Sembcorp’s project, as it ensures the availability of a fixed supply of coal for 20 years, critical for the smooth operation of the plant. This will enable the company to supply power to thousands of consumers in Andhra Pradesh and play an essential role in helping to reduce the severe shortage of power supply in Andhra Pradesh and southern India. The plant will also apply supercritical technology which allows for enhanced efficiency, thereby reducing emissions of carbon dioxide and other pollutants by consuming less fuel per unit of electricity generated compared to conventional sub-critical coal-fired generating units.
Besides this fuel supply agreement, the company also recently signed a long-term power purchase agreement in April 2013 for the sale of 500 megawatts of power to the Andhra Pradesh Power Distribution Companies for a period of 25 years.
This fuel supply agreement is not expected to have a material impact on the earnings per share and net asset value per share of Sembcorp Industries for the current financial year.
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ABOUT SEMBCORP INDUSTRIES
Sembcorp Industries is a leading energy, water and marine group operating across six continents worldwide. With facilities of over 5,800 megawatts of gross power capacity and over seven million cubic metres of water per day in operation and under development, Sembcorp is a trusted provider of essential energy and water solutions to both industrial and municipal customers. It is also a world leader in marine and offshore engineering as well as an established brand name in urban development.
The Group has total assets of more than S$13 billion and employs over 9,000 employees. Listed on the main board of the Singapore Exchange, it is a component stock of the Straits Times Index, several MSCI and FTSE indices as well as the Dow Jones Sustainability Asia Pacific Index.
Note to Editors:
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