South Korea’s Doosan Heavy Industries & Construction Co. has won a 1.15 trillion won ($1.05 billion) order from a Korea Electric Power Corporation (Kepco)-led consortium to supply key equipment including boilers and turbines for a new coal-fired power station in South Africa.
The company said in a regulatory filing on Tuesday that it signed a preliminary agreement with the Kepco-Marubeni consortium to supply boilers, turbines and other necessary equipment for a 630 megawatt (MW) coal-powered thermal power plant in Lapalele in Limpopo, a province located 300 kilometers northwest of Johannesburg in South Africa. The deal is worth 1.15 trillion won, which accounts for 8.28 percent of Doosan Heavy Industries & Construction’s consolidated sales last year, and it is an engineering, procurement, and construction (EPC) based contract, the company said.
The two parties aim to sign a final agreement in May next year after the Kepco-led consortium signs a power purchase agreement with South Africa’s Department of Energy scheduled next year, and it successfully sources funds for the project. The deal will be valid for 52 months from the official date when it notifies the consortium to embark on the construction process, the company said.
In October last year, a consortium of Korea’s state-run utility firm Kepco and Japan’s Marubeni Corp. was named the preferred bidder by South African Department of Energy to construct the coal-fired thermal power plant in Thabametsi, an area named after a mine located near the power station site, in Lapalele.
Under the deal, the Kepco consortium would build the power plant, as well as operate and sell energy from the plant to South Africa’s public utility provider Eskom Holdings for 30 years.
Doosan Heavy Industries & Construction shares on Tuesday ended down 2.2 percent, or 350 won, from the previous session at 15,800 won.
By Woo Je-yoon and Lee Eun-joo
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