Mitsui & Co., Japan’s second-largest general trading company, will build and operate a $3.3 billion coal-fired power plant in Malaysia in partnership with a local state-owned company.
Construction of the project, the first given to a foreign investor from a tender, will start this year, Tokyo-based Mitsui said today in a statement. The plant will have an annual capacity of 2,000 megawatts and begin generation in 2018 to meet a 25-year sales contract with state-owned utility Tenaga Nasional Berhad, Mitsui said.
A slump in commodity prices in the last two years due to slower economic growth in China is prompting Japanese trading companies to focus on essential goods and services such as food materials, power and water. Mitsui has expanded its global power capacity by 55 percent in two years to 8,500 megawatts as of March 2014, according to data on its website.
Besides partnering with 1Malaysia Development Berhad, Mitsui said it will also work with Japanese equipment manufacturers IHI Corp. and Toshiba Corp. and South Korean engineers and builders including Hyundai Engineering Co. to deliver the so-called ultra super critical coal-fired plant. The technology aims to cut greenhouse gas emissions.
Machinery and infrastructure businesses accounted for about 7 percent of Mitsui’s net income of 422.2 billion yen ($4.1 billion) in the fiscal year ended March 31.