Malaysian equity fund 1Malaysia Development Berhad (1MDB) has announced plans to issue bonds worth RM8.4bn ($2.6bn) for the construction of a 2 GW coal-fired power plant in Jimah, Peninsular Malaysia.
The plant, known as Project 3B, is expected to come online in stages, with the first unit planned to be operational in 2018 followed by the second unit in 2019. Both stages will be built by 1MDB in partnership with Japanese firm Mitsui & Co.
The plant will consist of two IHI ultra-supercritical steam generators and two Toshiba turbo generators. It will use the latest emissions control technologies, 1MDB said.
The firm aims to cover most of the project’s RM11bn cost with sukuk, or Islamic bonds, after a previous plan for RM8.4bn in debt financing through the Japan Bank for International Cooperation fell through. Unlike traditional bonds, a sukuk grants the investor shares in an asset.
1MDB owns 16 power and desalination plants in six countries and is to float a $3bn IPO in January 2015.