Sembcorp Industries’ wholly-owned utilities business has entered a joint venture agreement to provide wastewater treatment services to industrial customers in the Qinzhou Economic Development Zone (QEDZ), in Guangxi province, China.

Sembcorp will hold an 80% stake in the joint venture, Qinzhou Sembcorp Water Co., which will invest a total of RMB 62 million ($12.6 million) to build, own and operate a wastewater treatment plant in the QEDZ, with an initial capacity of 15,000 cubic metres per day.

The remaining 20% stake in the joint venture will be held by Guangxi Qinzhou Linhai Industrial Investment Co. (QLIC), which is wholly owned by the QEDZ Administrative Committee.

“With this, the QEDZ is set to become Sembcorp’s first beachhead in southern China. Sembcorp currently has energy and water operations in the Yangtze River Delta — in Shanghai, Nanjing and Zhangjiagang — as well as in the northern and northeast cities of Tianjin and Shenyang,” says Sembcorp in an SGX statement.

Expected to commence operations in the second quarter of 2011, the facility will serve industrial and municipal customers in the QEDZ, and is expected to be expanded in tandem with customer demand.

Under the agreement, the joint venture will have 50 years’ concession rights to provide wastewater treatment and reclaimed water to customers in the QEDZ. The concession area covers an area of roughly 67 square kilometres.