Tepco, Toshiba to manage power grids in Cambodia

Tepco, Toshiba to manage power grids in Cambodia

Tokyo Electric Power Co. Holdings will team with Toshiba to manage power
grids in Cambodia, hoping to secure a new earnings source as the utility
grapples with soaring cleanup costs for the Fukushima nuclear plant
disaster.

T.T. Network Infrastructure Japan, a joint venture between Tepco and
Toshiba, has signed a memorandum of understanding with a Malaysian company
handling power transmission in Cambodia. The venture will operate and
maintain 130km of 230,000-volt transmission lines that will connect power
plants in northern Cambodia to the capital, Phnom Penh.

The order, valued at roughly 1.6 billion yen ($14.7 million), includes
maintenance of two substations as well as training costs for workers. The
contract will last for 25 years. Separately, Toshiba will provide equipment
such as distribution transformers.

Power grid installations are expanding in Cambodia, as electricity demand
rises with economic growth. The Malaysian company will handle construction,
with completion slated at the end of this year, while Tepco assists the
business with know-how on operations. By combining Toshiba's products with
Tepco's expertise, the venture aims to offer high-quality service with
limited electricity losses during transmission and equipment failures.

Tepco began overseas consulting services related to power transmission
roughly 20 years ago. To further expand its business abroad, the utility
established T.T. Network with Toshiba in 2013, and the Cambodian project is
the venture's first business. T.T. Network is involved in around 20
negotiations for projects covering about 10 countries, primarily in
Southeast Asia and other emerging nations.

Tepco looks to secure new earnings sources quickly as cleanup costs for the
2011 Fukushima nuclear meltdowns continue to rise, with the latest estimate
reaching 21.5 trillion yen. The company's revised restructuring plan, due
out this spring, likely will position overseas power generation and
transmission as key steps to recovery.

For Toshiba, reeling from massive losses tied to the conglomerate's
ill-fated foray into the nuclear business, an increase in orders through
T.T. Network will help boost sales of the company's electrical power
equipment.

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Link to Original Article:
http://asia.nikkei.com/Business/Deals/Tepco-Toshiba-to-manage-power-grids-in
-Cambodia

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com