Cambodia Solar Power Plant (200MW) to be developed by Hong Lai Huat and CMEC

Solar Farm

Hong Lai Huat Group’s subsidiary entered into a non-binding memorandum of understanding (MOU) with China Machinery Engineering Corporation (CMEC) for potentially the largest solar farm project in Aoral Eco-City in Cambodia.

CAMBODIA : On 26 April 2021, Singapore real estate developer Hong Lai Huat Group Ltd announced that its wholly owned subsidiary, HLH Agriculture (Cambodia) Co., Ltd (“HLHA”) has entered into a non-binding Memorandum of Understanding (“MOU”) with Hong Kong-listed China Machinery Engineering Corp (CMEC) to develop and operate a 200 MW solar farm in Aoral Eco-City in the Kampong Speu province of Cambodia. CMEC is a subsidiary of China National Machinery Industry Corp (aka Sinomach)/中国机械工业集团(国机集团), a state-owned enterprise.

The Hong Lai Huat Group is also developing Aoral Eco-City, proposed to be a massive integrated agriculture eco-city project, through the same subsidiary. Approval from the Cambodian government to develop Aoral Eco-City was obtained in March 2021. The city will be developed on HLH Agriculture’s land in Aoral District in the Kampong Speu Province and will include an innovative mixed-use development, a warehouse and logistic hub. Agriculture and community living will also be included. The Aoral Eco-City will be powered entirely by solar energy. The Aoral Eco-City project is anticipated to attract an estimated US$10 billion in investments from Singapore and the international community to the area.

Both HLHA and CMEC have already signed a non-binding MoU to create a special purpose vehicle (SPV) and collaborate for at least 20 years, with a 20-year renewal option. Under the MOU, both the Hong Lai Huat Group and CMEC will form a special purpose vehicle (“SPV”) to undertake the collaboration for a period of a minimum of 20 years with a right of renewal for another 20 years.

According to the Hong Lai Huat Group’s General Manager and Executive Director Mr Ong Jia Jing, this Cambodia solar plant project could become the Kingdom’s largest. He also stated that a total investment of around US$200 million would be required.

CMEC will deliver one-stop, complete solar plant solutions for the project, including preliminary planning, engineering, procurement and construction (EPC), financing, operation and maintenance.

Pursuant to the terms of the MOU, the solar power plant will sell power to Electricite du Cambodge (EDC) under a purchase-power agreement (PPA). Hong Lai Huat Group will have the first right to purchase electricity at the same rate as EDC. Revenue generated under the PPA will be shared between HLHG and CMEC. As the MOU is non-binding, details will be confirmed in a binding agreement expected to be executed within the next three months.

CMEC Chief Representative Wang Haitao said CMEC was pleased to partner with HLHG to embark on the project given its track record in construction and real estate development, noting that the firm’s engineering expertise will ensure the success of the proposed solar farm. According to Mr Wang Haitao, “In line with the global transition to renewable energy, we are proud as one of the pioneers in providing clean energy in Cambodia.”



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