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Partial Sale of Equity in 2,000MW Ultra Super Critical Coal-fired Power Project in Malaysia

Jan. 20, 2016


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Mitsui & Co., Ltd. ("Mitsui", Head Office: Tokyo, President & CEO: Tatsuo Yasunaga), through 3B Power Sdn Bhd ("3B Power"), Mitsui's wholly owned subsidiary in Malaysia, has jointly established with Tenaga Nasional Berhad ("TNB"), which is the largest electric utility company in Malaysia, Jimah East Power Sdn Bhd ("JEP") for the purpose of construction and operation of a ultra super critical coal-fired power plant. Mitsui has entered into an agreement with Chugoku Electric Power International Netherlands B.V. ("Chugoku International", Head Office: Netherlands) , a wholly owned subsidiary of The Chugoku Electric Power Co., Inc. ("Chugoku Electric"), on the sale of 50% of Mitsui's share in 3B Power. Mitsui and Chugoku International signed a share purchase agreement and shareholders agreement on 20 January 2016. The share transfer will be made upon obtaining the approval from the Malaysian Government and TNB.

The Project is to construct, own and operate a 2,000MW (1,000MW x 2 units) ultra super critical coal-fired power plant and sell electricity to TNB under the Power Purchase Agreement with a 25-year term. The total project cost is expected to be approximately MYR 12 billion (circa JPY 320 billion). JEP has engaged EPC consortium which is comprised of IHI Corporation, Toshiba Corporation, Hyundai Engineering Co., Ltd. and Hyundai Engineering & Construction Co., Ltd for the construction of the Project and will be introducing high efficiency ultra super critical technology utilizing major equipment supplied by Japanese manufacturers. In addition, JEP completed debt finance of MYR 8.98 billion (circa JPY 240 billion) in December 2015, by issuing Islamic bonds, which was the world largest issuance of Islamic bonds in 2015.

Chugoku Electric has been operating the Misumi coal-fired power plant—the first ultra-super critical coal-fired power plant in Japan—for over 17 years and therefore has outstanding know-how on coal-fired power plant operation. Mitsui and Chugoku Electric will aim for the contribution to power sector in Malaysia through collaboration with TNB as a local partner.

Mitsui has declared as a basic policy that it will pursue both "New Investments" and "Shareholder Return" backed by strong cash generation capabilities in the Medium-term Management Plan established and announced in May 2014. For the purpose of accumulation of good quality assets, Mitsui will continue with strategic asset recycling.

Project Overview

Sponsors (Before sale of equity) TNB (70%), Mitsui (30%)
(After sale of equity) TNB (70%), Mitsui (15%), Chugoku Electric (15%)
Business Activity Construction, Own and Operation of Power Plant (BOO)
Capacity Ultra Super Critical (USC) coal-fired power generation 2,000MW (1,000MW x 2 units)
Offtaker Tenaga Nasional Berhad (TNB)
Project Cost Approximately MYR 12 billion
Schedule 2015 Dec.: Finance Close
2019 June: Commercial Operation of 1st Unit
2019 Dec.: Commercial Operation of 2nd Unit
Location Mukim Jimah, Negri Sembilan, Malaysia

Structure

Structure

Notice:
This announcement contains forward-looking statements. These forward-looking statements are based on Mitsui's current assumptions, expectations and beliefs in light of the information currently possessed by it and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui's actual results, financial position or cash flows to be materially different from any future results, financial position or cash flows expressed or implied by these forward-looking statements. These risks, uncertainties and other factors referred to above include, but are not limited to, those contained in Mitsui's latest Annual Securities Report and Quarterly Securities Report, and Mitsui undertakes no obligation to publicly update or revise any forward-looking statements.
This announcement is published in order to publicly announce specific facts stated above, and does not constitute a solicitation of investments or any similar act inside or outside of Japan, regarding the shares, bonds or other securities issued by us.

Information

For inquiries on this matter, please contact

Mitsui & Co., Ltd.
Corporate Communications Division
Shuhei Iwanaga
Telephone: +81-3-3285-7596
Facsimile: +81-3-3285-9819