Photo courtesy Asiatic Group

Asiatic Group managing director George Tam (left) and Electricite du Cambodge managing director Tan Kim inked a deal in Phnom Penh last month under which Asiatic will generate power for the Phnom Penh Economic Zone.

Singapore’s Asiatic Group Holdings Ltd. has clinched a contract worth nearly $500 million to supply power to the Phnom Penh Special Economic Zone.

The 99-year contract, Asiatic Group's largest single power deal in Cambodia and its fourth in the country since 2005, is worth "potentially" $475 million, the company said in a statement June 25.

Colben System Pte. Ltd, a wholly owned subsidiary of Asiatic, would undertake the contract with Japan Cambodia Development Corporation, which is spearheading the development of the special economic zone.

Japan Cambodia Development Corporation is a joint venture among Japan-listed Zephyr Co., Ltd., Japan-Cambodia Development Institute Corporation, and Phnom Penh SEZ Co., Ltd.

Under the contract Asiatic will supply 5MW to the zone in the first year and 10WM in the following years. The electricity will come from an oil-fired power plant the company will build in Sihanoukville, the statement said.

"Asiatic is expected to fund this new 10MW contract, with an estimated investment cost of about US$12 million, through a combination of bank borrowings and internally generated funds," the statement said.

The contract is expected to add about $4.8 million to Asiatic's revenue once the power plant is fully operational in 2009, it said.

The special economic zone is being developed on a 360-hectare site about eight kilometers west of Phnom Penh International Airport. The zone is part of a government strategy to attract more foreign investment and increase exports by providing investment incentives, including tax holidays.

Asiatic's earlier contracts were all awarded by the state-owned utility company Electricite du Cambodge. In 2005 Asiatic signed a deal to supply 5MW to Sihanoukville and 10MW to Phnom Penh. In 2007 the company was awarded a contract to supply Sihanoukville with a further 5MW. In April this year the company signed a contract to provide Phnom Penh with an additional 10MW.