Pestech bags US$437.5m Cambodian power transmission project

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KUALA LUMPUR: Pestech International Bhd’s 60%-owned subsidiary Diamond Power Ltd (DPL) has procured all the necessary legal documentation relating to the development of the 230kV Kampong Cham–Kratie transmission system project in Cambodia on a build–operate–transfer basis.

This signifies the full and effective ownership of the project by DPL, and marks the entry of the Pestech group as an independent power transmitter. The cost for the development of the project is US$92.21 million (RM335.4 million), which is to be completed by Nov 30, 2017.

In a filing with Bursa Malaysia yesterday, Pestech (fundamental: 0.9; valuation: 0.7) said the duration and validity of the power transmission agreement and novation agreement for the implementation agreement will continue for 25 years from the scheduled commercial operation date.

“The power transmission charges to be paid by Electricite Du Cambodge, Cambodia’s state-owned utility company, to DPL will be US$12.25 million per year for the first three operating years from the scheduled commercial operation date,” it said.

The rates will then be US$18.22 million per year from the fourth operating year until the end of the term. The total collection of charges will amount to US$437.5 million for the entire 25-year concession period. The project aims to bring electricity from the upcoming Hydropower Lower Sesan 2 Co Ltd hydropower plant in Stung Treng to Kratie and Kampong Cham.

 

This article first appeared in The Edge Financial Daily, on April 9, 2015.