April 24, 2024

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[THE INVESTOR] Korea's STX Marine Service said on Oct. 28 that it has secured a contract to restore and run diesel-fueled electric power plants in Iraq.

The ship management service and power plant operation and maintenance (O&M) company said the US$500 million deal is a five-year work project on four 900 megawatt-capacity electricity generation units in the Middle Eastern country.

The project calls for 100 South Korean engineers to be dispatched by STX, along with the hiring of 500 local workers. The company said work started as of July 1.

The Busan-based company added that it inked a so-called credit bills negotiated facility deal with the Dubai branch of Standard Chartered Bank on Oct. 26(Korea time). The financial arrangement is worth US$125 million, with the company seeking additional ties with other financial institutions at home and abroad to cover the remaining US$375 million of the Iraqi contract.

STX Marine Service said the deal with Standard Chartered is critical as any business contract in Iraq needs to receive firm financing in order to make progress.

The O&M company, meanwhile, claimed that the deal is noteworthy because the company competed with large International rivals and Iraqi operators to grab the contract from Iraq's Ministry of Electricity.

"STX won because of its proven track record in such projects and its solid infrastructure in the country," a corporate source claimed. He added that with the latest contract, the company has gained a valuable base to secure other reconstruction works in the resource-rich country going forward.

By Song Seung-hyun and newswires (ssh@heraldcorp.com)