SEMBCORP SUCCESSFULLY COMPLETES FIRST PHASE OF US$1 BILLION SALALAH INDEPENDENT WATER AND POWER PLANT IN OMAN

Singapore, July 18, 2011 – Sembcorp Industries (Sembcorp) is pleased to announce that the Sembcorp Salalah Power and Water Company, a joint venture company between Sembcorp’s fully-owned subsidiary Sembcorp Utilities and the Oman Investment Corporation, has successfully completed the first phase of its US$1.0 billion Salalah Independent Water and Power Plant (IWPP) in Oman. With the completion of the first phase, the facility began dispatching 61 megawatts of power, on schedule, to the Dhofar power grid in Southern Oman.

Targeted to begin full commercial operations in the first half of 2012, the Salalah IWPP will consist of a gas-fired power plant which will have a total net capacity of 445 megawatts and a seawater desalination plant which will employ reverse osmosis technology to produce 15 million imperial gallons (69,000 cubic metres) per day of water.

Mr Tang Kin Fei, Sembcorp’s Group President & CEO said, “We have met the tight schedule of 19 months from the signing of the Power and Water Purchase Agreement (PWPA) to complete the first phase of our Salalah IWPP on time. This is especially vital as the completion is timely to meet the surge in power demand in Dhofar, which coincides with the summer months every year.

Besides playing a significant role in providing power during the demand peak, the facility also enables Dhofar to obtain cheaper power during the summer period. We are confident to complete the entire project ahead of schedule in April 2012.”

Sembcorp, which was named the Water Company of the Year at the prestigious Global Water Intelligence's 2011 Global Water Awards, also clinched the Desalination Deal of the Year award for its Salalah IWPP project. Despite the deal coming at the tail end of the financial crisis, the project’s financing team nevertheless secured funding support at a competitive cost. Standard Chartered Bank, Bank of China, China Development Bank, BankMuscat, KfW-IPEX Bank, Sumitomo Mitsui Banking Corporation, National Bank of Oman and Bank Sohar supported Sembcorp in the financing of this project.

Sembcorp Salalah Power and Water Company is 60% owned by Sembcorp Utilities and 40% owned by the Oman Investment Corporation.
 
The completion of the first phase of the Salalah IWPP is not expected to have a material impact  on the earnings per share and net asset value per share of Sembcorp Industries for the current financial year.