Malaysia utility to issue bonds to fund 900-MW Murum

Malaysia utility Sarawak Energy Berhad is expected to sell 3 billion ringgits (US$934 million) in Islamic bonds to finance construction of the 900-MW Murum hydroelectric project in Malaysia’s Sarawak State.

Malaysia’s Business Times reported Hong Leong Islamic Bank Bhd won a solicitation to arrange the Islamic bond sale.

The government of Sarawak entrusted Sarawak Energy with implementing Murum, proposed for the Upper Rajang River Basin. Sarawak Energy is developer of the 2,400-MW Bakun Dam on Borneo Island in Sarawak. Unlike Murum, Bakun is funded by the Malaysian government.

Murum is among several major hydropower projects expected to be developed under a recently announced Sarawak Corridor of Renewable Energy (SCORE) covering 70,000 square kilometers of Sarawak State. (HNN 2/12/08)

Business Times also reported Sarawak Energy plans to invite tenders for construction of Murum in the next two months. The Edge financial daily reported a consortium of Cahya Mata Sarawak Bhd, Naim Cendera Bhd, and China Three Gorges Project Corp. likely would be awarded the construction job.

Sarawak Energy Berhad and China Three Gorges Project Corp., the builder of China’s 22,400-MW Three Gorges Dam, signed a memorandum of understanding in August 2007 to undertake a comprehensive review of Murum’s civil construction works and mechanical and electrical plant and equipment. (HNN 8/15/07)

In the event Sarawak Energy awards a development contract to China Three Gorges, the expenses of its study will be counted as part of the engineering cost component. If the Chinese firm does not receive the contract, the expenses will be paid by Sarawak Energy as consulting fees.

It is estimated the project could be completed by 2013 for 3 billion ringgits (US$934 million).

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