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KUALA LUMPUR (June 20): Genting Bhd (KL:GENTING) on Thursday proposed to acquire a 49% equity interest in SDIC Jineng (ZhouShan) Gas Power Generation Co Ltd, which is developing up to 1,490 megawatt (MW) capacity gas-fired power plant in ZhouShan, eastern China’s Zhejiang province.
Genting is buying the 49% equity interest in SDIC Jineng from Jineng International Energy Co Ltd for 100 million yuan (RM64.87 million).
Additionally, Genting estimates that a further pro-rata equity investment of 328 million yuan (RM212.8 million) will be required up to target commercial operation next year.
The group said in the statement that the purchase price and equity investment totalling 428 million yuan (RM277.68 million) will be fully funded by internally generated funds.
SDIC Jineng is expected to contribute up to U$346 million (RM1.63 billion) yearly in revenue for 25 years, Genting president and chief operating officer Datuk Seri Tan Kong Han told reporters after the signing ceremony.
Approximately a total of US$8.6 billion revenue is expected to be generated from the gas-fired power plant in 25 years.
The diversified conglomerate said its indirect subsidiary Genting MZW Pte Ltd has entered into a share sale and purchase agreement with Jineng International Energy Co Ltd to buy the 49% stake.
Meanwhile, Genting’s indirect subsidiary Genting Sanyen (Malaysia) Sdn Bhd has also signed a heads of agreement with SDIC Power Holdings Co Ltd to cooperate in the power project. SDIC Power owns a 51% stake in SDIC Jineng.
The construction works started in the fourth quarter of 2023 and has achieved 10% overall progress at this juncture.
“The project is one of the three key H-class projects listed in the 14th five-year plan of Zhejiang province.
“It uses H-class gas turbine manufactured by GE Vernova Inc, which is the most efficient gas turbine in the world and the project is expected to be the first H-class unit to operate within Zhejiang province when it achieves commercial operation in 4Q2025 (fourth quarter of 2025),” Genting said.
This is not the Genting group’s first venture into the power generation industry in China. Genting and SDIC Power have been involved in a strategic partnership since 2013.
Genting holds a 49% stake in SDIC Genting Meizhou Wan Electric Power Co Ltd that operates a coal-fired power plant in Meizhou, southern China’s Fujian province.
Genting together with SDIC Power also operate a 660MW supercritical coal-fired power plant in West Jawa, Indonesia, and a 100MW Dongwu Cha solar plant in China, which is scheduled to be in operation in early 2025.
As of end-2023, SDIC Power has commissioned 40.86 gigawatt (GW) power stations, including 21.28GW hydropower, 7.04GW wind and solar power, and 12.54GW thermal power, making it the top 10 power company in China, according to Genting.
Trading in Genting's shares has been suspended from 4.20pm on Thursday, pending the material announcement.
Genting shares were last traded at RM4.69, down one sen or 0.21%, giving the group a market capitalisation of RM18.18 billion.