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12 June 2006 - Singapore's Island Power is looking to raise S$600m ($376m) to build Singapore's first independent gas fired power plant.
Island Power, owned by US-based Intergen, is planning to build a combined cycle gas plant with a capacity of 785 MW - equivalent to eight per cent of Singapore's existing power generating capacity. The project was first mooted in 2002 but was delayed due to legal wrangling over sharing the Sumatra-Singapore pipeline to bring in Indonesian gas for its plant. The gas from South Sumatra will be brought to an eight-hectare site on Jurong Island.
Island Power hopes to begin construction by the year-end, and the power plant is expected to begin commercial operations by early 2009. The total cost is expected to be nearly S$1bn, of which one third would be paid for through internal resources.
Financiers are expected to be agreed in August with Island Power hoping to include domestic lenders. Said Michael Reading, managing director of Island Power Company, "The way project finance products are put together, they are much dependent on the perceived risk of the project. So we always like to see the local banks involved in our syndicate with other foreign banks as well. They are more familiar with how the government regulations are put together and how the government behaves - more so than foreign banks." _
Singapore now has a power generating capacity of nearly 10 GW; nearly double its peak electricity demand. Despite this, Island Power says there is still a need for cost-efficient plants. Reading said, "It's not just in terms of the overall quantity of electricity, but it's the cost competitiveness of electricity. And in Singapore right now, most of the existing plants are very expensive, because a large number of them use an older, less efficient technology."
Island Power says its facility will also diversify Singapore's energy sources because it taps a different Indonesian gas field.
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