CDB provides $175 million loan for Pantai 2 Sewage Treatment Plant Construction Project

CDB provides $175 million loan for Pantai 2 Sewage Treatment Plant Construction Project In late 2009, Beijing Enterprises Water Group Limited (BEWGL) entered into a Memorandum of Water Cooperation with the Malaysian Government.

Under the terms of the Memorandum BEWGL agreed in principle to invest RMB 12 billion in the construction of 19 sewage treatment plants, supporting pipe networks and auxiliary facilities in Malaysia.

On July 4, 2011, BEWGL received the approval from Malaysia's Ministry of Energy, Green Technology and Water to construct the Pantai 2 Sewage Treatment Plant in the city of Kuala Lumpur.

Then, on November 3, 2011, BEWG (M) Sdn Bhd (BEWGM) — a wholly owned subsidiary of Beijing Enterprises Water Group Limited (BEWG) that was locally incorporated in Malaysia in January 2010 — signed a contract with the Malaysian Government to construct the Pantai 2 sewage treatment plant. The total value of the contract was approximately RM 980 million (or RMB 2.1 billion).

Several months later, in March 2012, China Development Bank’s Hong Kong Branch issued a loan worth $175 million to BEWGM for the Pantai 2 Sewage Treatment Plant Construction Project.

The borrower pledged a formal security interest (including future revenue to be generated by the sewage treatment plant) to the lender. BEWGL also issued a corporate guarantee in support of the loan.

The borrower was to use the proceeds of the CDB loan to finance the 2011 commercial contract with the Government of Malaysia.

The purpose of the project was to construct a sewage treatment plant in the city of Kuala Lumpur to serve the Pantai catchment area, which covers 6,700 hectares in the central and south-western parts of the city—including Bandar Baru Sentul, Sentul Raya, the Bukit Kiara central business district, Taman Botani and parts of Petaling Jaya.

The plant was designed with a treatment capacity of 320,000 tons/day and it was meant to serve a population of 1.43 million.

The main unit of the sewage treatment plant was to be built underground, with only the sludge digestion and administrative building built above ground.

The project also involved the construction of a large-scale multi-functional sports leisure landscape park above the underground sewage plant. The Pantai 2 Sewage Treatment Plant is the third largest underground sewage plant in the world. BEWGM was the EPC contractor responsible for implementation. Its EPC contract specified a 4-year period of construction and a 2-year period of operations and maintenance.

The date of project site possession was July 28, 2011. The project was officially accepted by the local authorities on June 30, 2016. At that point, the Pantai 2 sewage treatment plant had already been successfully running for 11 months. An official project handover ceremony took place on May 25, 2017.