Singapore-listed SBI Offshore has won a contract for the sale of solar power in the Maldives.
The contract marks SBI Offshore’s first solar power contract after shareholders in September approved the company’s strategy to diversify into renewable energy.
According to SBI Offshore’s filing to the Singapore Exchange (SGX), the contract was signed by the company’s 51%-owned subsidiary Graess Energy and China Machinery Engineering Corporation (CMEC).
Under the contract, Graess Energy and CMEC will form a special-purpose company to own, operate, and sell solar power to Maldivian state-owned power company State Electric Company (STELCO).
The special-purpose company is expected to sign a power purchase agreement (PPA) in mid-October for a term of 20 years, following which the full ownership of the solar photovoltaic system will be transferred to STELCO.
The solar photovoltaic system will have an initial generation capacity of 1.5 MW, and its total cost is expected to be in the region of USD3.5 million. Total revenue from the sale of power is expected to be about USD550,000 per year.
“With this award, Graess Energy will continue its effort to pursue more solar photovoltaic projects in the Maldives,” stated SBI Offshore in its filing to SGX.
The solar photovoltaic system is expected to be completed in the first quarter of 2016 and the PPA is not expected to have a material impact on the SBI Offshore’s earnings per share and net tangible asset per share in the current financial year ending on 31 December 2015.