-- Chubu Electric Power Co., Japan's third-biggest utility, and Shikoku Electric Power Co. have bought a 5 percent stake each in a $3.9 billion Qatari project to build a power-generation and water-desalination plant.

The stake was acquired from Mitsui & Co., Japan's second- largest trading house, the companies said in a statement in Tokyo today. The project will be able to generate 2,730 megawatts of electricity and produce 290,000 metric tons of fresh water from sea water.

Japanese utilities have been acquiring overseas power- plants as local electricity demand growth slows because of a shrinking population and energy-conservation promoted in households and manufacturers. Chubu Electric plans to expand abroad in the next three years through March 2011, it said in the statement.

The plants will be in the Las Raffan industrial area, 80 kilometers (50 miles) north of Doha. Commercial operations are slated to begin in April 2011, the statement said.

After the sale, Mitsui will own 10 percent of the project, dubbed Las Raffan C., according to the statement. Suez SA has 20 percent interest while Qatar Petroleum and Qatar Electricity & Water Co. hold a combined 60 percent.