The Straits Times / The Business Times News on Hyflux

Hyflux in venture to build Algerian desalination plant

By TETTYANA JASLI
March 30, 2007
The Business Times

SINGAPORE'S Hyflux Ltd yesterday announced that it and Malakoff International of Malaysia have agreed on a joint venture with the Algerian Energy Company (AEC) to build and run a desalination business in the north African country.

The project company will undertake a 25-year concession to design, develop, finance, construct, operate and maintain a seawater desalination plant at Tlemcen, Algeria.

It will be granted the right to supply desalinated water to L'Algerienne Des Eaux, the state-owned national water utility of Algeria, and the Algerian national oil company Sonatrach.

The project is expected to be completed within 24 months from financial close and is estimated to cost US$238 million.

Hyflux will exclusively undertake all engineering, procurement and construction works through its subsidiaries. These works are estimated at US$205 million.

AEC is responsible for the development of electricity and gas-related industries in Algeria.

Malakoff International is a wholly owned subsidiary of Malakoff Berhad and is an independent power producer which operates and maintains power stations in Malaysia.

The project is expected to have a material impact on Hyflux's financials for the current financial year.

The announcement of the joint venture comes two days after Hyflux announced that it had secured some 253 million yuan (S$49.7 million) worth of water projects in China.

Meanwhile, ABN Amro yesterday reiterated its 'buy' call on Hyflux shares, with a target price of $3.14.

The shares closed up four cents at $2.62.