KUALA LUMPUR: JAKS Resources Bhd has teamed up with China Huadian Corporation's unit to undertake an independent power plant project in Hai Duong Province, Vietnam - comprising of two units of 600 megawatts each.

JAKS said on Thursday, April 8 the project would be undertaken under a build-operate-transfer (BOT) structure and run as an independent power plant (IPP) with a 25-year power purchase agreement (PPA) with Vietnam Electricity.

"At the expiry of the concession term, JAKS Resources will transfer the plant to Vietnam's Ministry of Industry and Trade," it said in a statement after the signing ceremony in Hanoi. It was witnessed by Prime Minister Datuk Seri Najib Razak and Vietnam Prime Minister Nguyen Tan Dung.

The plant will use domestic coal supplied by Vietnam National Coal-Mineral Industries Group (Vinacomin) from nearby coals mines in the Quang Ninh province. The coal supply arrangement will be specified in a 25-years coal supply agreement with Vinacomin.

JAKS said the project site land will be leased from the Department of Natural Resources and Environment of Hai Duong People's Committee for 25 years. Work is slated to begin in the last quarter of this year and the commercial operation for the first unit of 600 megawatt scheduled in the fourth quarter of 2014 and the second unit of 600 megawatt to follow in the second quarter of 2015.

JAKS said it had concluded negotiations with China Huadian Corporation's unit, China Huadian Engineering Co. Ltd for the engineering, procurement and construction (EPC) contract for the project.

To recap, JAKS had on Oct 17, 2008 received a letter from the Veitnam government to prepare an investment project report to be submitted to the relevant authorities in Vietnam for the IPP. On Thursday, April 8 this year, the relevant authorities and government agencies in Vietnam signed various memorandum of agreements with JAKS to confirm the terms and conditions of the project documents.

China Huadian Engineering is one of the largest EPC Contractors in electric power field in China, with three design companies, 20 subsidiary and holding companies, seven joint ventures with foreign companies and 50 cooperative fabrication and construction enterprises.

Its parent company, China Huadian Corporation, owns and manages more than 180 power stations with the total installed capacity of 75,500 MW located in 21 provinces and regions in China.