The Matarbari power plant construction project includes the construction of a 1200㎿ (600㎿ x 2ea) coal-fired thermal power plant on Matarbari Island, Chittagong, approximately 280km southeast of Dhaka, the capital of Bangladesh. Site improvement and port construction are also part of the project, expected to last 7 years. POSCO E&C invested a total of USD 4.5 billion in this project which is the largest coal-fired thermal power generation project in Southwest Asia. POSCO E&C is in charge of civil engineering for the power plant worth USD 840 million and the construction of the coal processing facilities and subsidiary facilities.

The Bangladeshi government and the Japanese government have been working together on this project as a means to speed up the low electrification rate of Bangladesh. The Sumitomo Corporation Consortium, which has been cooperating with POSCO E&C, won the contract last month from the project owner Coal Power Generation Company Bangladesh Limited.

POSCO E&C also recently won the contract to build the Yangon Waterworks Improvement Project in Myanmar worth USD 53 million. POSCO E&C selected Myanmar as one of its 5 strategic countries, and built the Yangon Hotel, the tallest landmark building in Myanmar. It is now accelerating its efforts to make inroads into the Myanmar construction market. Both projects are funded by the Japan International Cooperation Agency.

POSCO E&C President Chan-geon Han said, “We won this contract thanks to our world-class EPC technology and expertise, which has been recognized in the Central and South American energy plant markets. This contract is all the more meaningful because we won it at a time of declining overseas business due to a dip in international oil prices.”

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On September 30, POSCO and POSCO E&C sold shares owned by POSCO E&C as well as issued new shares, finalizing the deal which was first discussed in August 2014 following a letter of intent rendered by the PIF. Following this agreement, POSCO E&C retains 58.2 percent of its shares.

The deal accommodates the needs of each party. POSCO is expected to fortify its internal stability, while Saudi Arabia can rapidly respond to the changing energy markets in the post-oil era. In June of this year, after POSCO signed an agreement with PIF, Standard and Poor’s (S&P) raised POSCO’s credit rating from Better Business Bureau BBB+, Negative to BBB+, Stable. This agreement will serve as momentum for POSCO to improve the group’s entire financial health. Furthermore, POSCO E&C will improve its financial structure and achieve both transparency of management and efficiency of operation, with two directors appointed by PIF to be involved with the company’s management.

In the future, POSCO E&C and PIF will establish a joint venture, POSCO E&C SAUDI ARABIA, with an investment ratio of 4:6, respectively. By doing so, the two parties will expand their cooperative business efforts for a series of infrastructure projects including a railway, hotel and other construction projects for the Saudi Arabian government, as well as energy and plant businesses. Through this partnership, both parties are expected to enjoy gains as POSCO will see results in profitability and stability by expanding businesses in the Middle East, and the PIF will have access to POSCO’s advanced construction technologies.