South Korea’s state-run utility operator Korea Electric Power Corp. (KEPCO) said Wednesday its consortium has won a deal to construct and operate a combined cycle power plant in Pulau Indah, Malaysia., and plans around $250 million in sukuk issuance structured in the Malay unit for the first time as a Korean company to finance the project.

It is the first power plant order in Malaysia for KEPCO that has been aggressive in expanding its footprint abroad. It has already built and operated a number of power plants in Japan, the Philippines and Vietnam.

The Pulau Indah project in Malaysia aims to construct and run a 1,200-megawatt combined cycle gas-fired power plant in Pulau Indah, 60 kilometers southwest of Malaysia’s capital Kuala Lumpur. KEPCO’s consortium with Malaysia’s energy company Tadmax signed a 21-year power supply contract in a build-own-operate (BOO) deal.

The Korean utility company holds a 25 percent stake in the project that is expected to cost about $1 billion. To finance its share of $250 million in the project, KEPCO plans to issue Islamic bonds for the first time as a Korean company.

To win the project, KEPCO formed a consortium with Tadmax in September and received approval for the joint development project from Malaysia’s Energy Commission. KEPCO aims to obtain final project approval from the Malaysian government in the third quarter next year and break ground for the plant in the fourth quarter of 2019 to embark on the commercial operation in 2023.

The company hopes to successfully complete the project so Malaysia can serve a new gateway to KEPCO’s other Asian markets, KEPCO official said, adding that the company expects the latest order would help it earn more overseas orders.

By Kang Doo-soon and Lee Ha-yeon

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