Sembcorp Industries said its wholly-owned subsidiary, Sembcorp (China) Holding Co, the company has signed a joint venture agreement to build, own and operate an industrial wastewater treatment plant in the Jingmen Chemical Industrial Park (JCIP).

Sembcorp will own a 95% stake in the joint venture, while Jingmen Xinyuan Investment Company, wholly owned by the Duodao District Government of Jingmen city and a business arm of the JCIP Administration Committee, will hold the remaining 5%.

At a total investment of RMB98.7 million ($20.5 million), the facility will have an initial capacity of 10,000 cubic metres per day with capabilities to treat multiple streams of industrial wastewater. Expected to be completed in the first half of 2016, the facility will provide industrial wastewater treatment services to companies in the JCIP under a 30-year exclusive concession agreement.

The total project investment of RMB98.7 million will be funded through a mix of equity and borrowings. Sembcorp’s 95% share of the equity investment amounts to $7.8 million, which will be financed by internal funds.

The 27.6-square kilometre JCIP houses a six million tonnes per annum oil refinery owned by SINOPEC Jingmen, as well as downstream petrochemical, coal-to-chemicals and fine chemicals companies.

With this expansion to Hubei province, Sembcorp’s utilities business now extends across 11 provincial regions in China.

The transaction 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