Updated: Aug 25, 2020
MALAYSIA ISSUED RFP FOR WASTE-TO-ENERGY PPP PROJECT
Malaysia issued a request for proposal (RFP) for a waste-to-energy PPP project in the state of Johor. The project will be located in the Bukit Payong area of Batu Pahat district, as per the Ministry of Housing and Local Government.
The RfP is eligible to companies with the following requirements:
· at least 51% of the equity is owned by local company
· experience in solid waste management, including solid waste treatment facilities and landfills
· experience in operating solid waste management facilities with a minimum capacity of 800 metric tonnes-per-day
· proposed technology has a track record of at least 3 years
· proposed technology can operate at least 8,000 hours a year
Malaysia aims to develop at least six waste-to-energy plants by 2021 including Sungai Udang in Malacca state, Bukit Payung in Terengganu state, Seelong in Johor state, Samling in Selangor state and Jabor in Pahang, Zuraida Kamaruddin, the minister for Housing and Local Government, was cited as saying by local media.
MALAYSIAN BIOMASS PLANT LOCKS IN 21-YEAR FEED-IN-TARIFF
A 4 MW biomass project, backed by Malaysian waste management firm Tex Cycle Technology, was granted a 21-year feed-in-tariff.The FiT price will be MYR 0.3784 (7.85 US cents) per KWh approved by the Sustainable Energy Development Authority (SEDA) Malaysia. Malaysia-listed utility firm Tenaga Nasional Berhad will act as the offtaker.
The company's financial close for the project is slated for Oct-21, and commissioning is planned in Mar-23 with commencement date of the feed-in-tariff is two months later.
The project, which will be located in Malaysia's Kedah state, will be funded through the shareholders' balance sheet and bank loans.
In Mar-20, Tex Cycle Technology incorporated Pakar B2E, the owner of the project, jointly with renewable technology firm Pakar Go Green and agricultural company KLPK Niaga.
Tex Cycle Technology indirectly owns a 60% stake in the project, while 30% is owned by Pakar Go Green and the remaining by KLPK Niaga.
CHUKAI 10 MW BIOGAS PROJECT
A subsidiary of Malaysian timber company BTM Resources will develop a 10 MW biomass power project in the state of Terengganu. The project, approved by the Sustainable Energy Development Authority (SEDA), will sell power to Malaysian national utility company Tenaga Nasional Bhd at an approved feed-in-tariff (FiT) of MYR 0.34 (USD 0.08) per kWh for 21 years.
The timber company's arm, BTM Biomass Products, expects to sign a power purchase agreement (PPA) with Tenaga in Oct-20 and will start constructing the project in Chukai district in Jun-21 with planned completion in Dec-22.
Malaysia-listed BTM is involved in logging, constructing sawmills, trading in timber, logs and plywood, kiln-drying operations, timber moulding, manufacturing finger-jointed timber and lamination boards, and leasing plant and machinery. The company is looking to diversify its operations as its timber business has been affected by the high production cost in the wood-based industry.
TENAGA TO SIGN SOLAR POWER CONTRACTS
Tenaga Nasional Bhd announced that it will purchase electricity from the two winners of the Large Scale Solar 3 (LSS 3) tender last year. The two contracting parties were
Coara Solar Sdn. Bhd. & ib vogt GmBH
TTL Energy Sdn Bhd & ENGIE Energie Services S.A.
Both bidding groups signed 100 MW, 21- year contracts with Tenaga.
Coara Solar & ib vogt's project is in Marang, Terengganu; and TTL Energy & ENGIE are developing a project at Kerian, Perak. Both projects are due to be commissioned towards the end of 2020. Earlier this year, ENGIE was looking at Sukuk and project finance options to raise capital for its winning project.
In Feb-19, Malaysia invited bids for its third LSS round for a combined 500 MW of projects. Bidding rules stipulated that foreign entities could not own more than 49% of a bidding consortium.
Last August, the Energy Commission received 112 bids in the LSS 3 tender. The lowest offered to sell 100 MW of renewable power to Tenaga Nasional at a price of MYR 0.18 (USD 0.042) per KWh while the highest offered 9.9 MW at MYR 0.5800 per KWh. The vast majority of the bids fell in a range of MYR 0.22 to MYR 0.32 per KWh.
In Dec-19, Malaysia's Energy Commission announced the five winners of the LSS3 tender.
MALAYSIA’s FOURTH 1 GW LARGE SCALE SOLAR TENDER
Malaysia launched a fourth 1 GW large scale solar (LSS) tender for domestic developers. The country's Energy Commission last Sunday invited companies or consortiums to develop, finance and operate solar power projects.
Only private companies which are 100% locally owned or listed companies with a 75% local shareholding if listed on Bursa Malaysia will be allowed to bid for the projects. Domestic and internationla developers were allowed to participate in previous tenders. Malaysia expects the tender to stimulate the country's economy and increase the country's share of renewable power.
Developers can bid for up to 50 MW and can only submit three bids. The projects are expected to be commissioned by De-23. Previous LSS tenders have allocated projects with a combined capacity of about 1.4 GW. The LSS scheme was floated in 2016 to end the feed-in tariffs (FiTs) system for solar power pricing in Malaysia.
Ib vogt GmbH and Coara Solar Sdn; Cypark Resources Berhad and Impian Bumiria; JKH Renewables and Solarpack; ENGIE Energie Services and TTL Energy; and Konsortium Beseri Jaya and Hanwha Energy Corp. are among the previous winners of LSS tenders.
ENGIE TO PARTNER WITH SUNWAY FOR DISTRICT COOLING PROJECTS
Kuala Lumpur-listed Sunway Construction and French energy firm ENGIE will launch a joint venture to develop district cooling projects in Malaysia, Sunway.
Both firms are working on the details of the agreement and the official launch of the partnership will take place within 2020.
The JV will focus on developing, engineering, financing, building, operating and maintaining greenfield and brownfield district cooling systems. It will be owned by Sunway Construction Sdn, a wholly-owned subsidiary of Sunway Construction, and Singapore-based Engie Southeast Asia, which will have a majority stake.
Sunway will fund its share of the future project cost through a mix of equity and debt, as the cost of new district cooling systems tends to be high, she said, adding that the company is open to raising financing from both domestic and international lenders.
Sunway Group, a Malaysian conglomerate with interests in real estate, education, healthcare, retail and hospitality, owns a majority stake in Sunway Construction.
Engie, previously known as GDF Suez, operates 393 district heating and cooling networks globally, including four district cooling systems across the Philippines, Malaysia and Singapore.
JV FORMATION SIGNALS PROGRESS ON MALAYSIA EAST COAST RAIL LINK (ECRL) PROJECT
Two companies have signed a joint venture agreement related to the M$44 billion ($10.3 billion) East Coast Rail Link (ECRL) project. ECRL is a rail line between the east coast of Malaysia and the South China Sea.
Landasan Surimas (LSSB) and Perbadanan Kemajuan Negeri Pahang (PKNP) have formed the JV Taraf Raya (TRSB) to provide mechanical and civil work on the ECRL.
Their interests in the JV are:
· LSSB – 70%
· PKNP – 30%
Bursa Malaysia-listed OCR Group has an indirect equity interest in LSSB of 40%.
The East Coast Rail Link project has had a tumultuous ride. The administration of Mahathir Mohamad, the seventh prime minister of Malaysia, had suspended the project in Jul-18, then officially mothballed it in Jan-19 before resurrecting it in Apr-19.
The EPC contractor renegotiated the contract with the Malaysian government in Apr-19. New terms of the contract included Malaysia Rail Link and CCCC sharing the operations and maintenance risk through a 50:50 joint venture, with equal share of downside risk and the government-owned SPV keeping an 80% share of upside risk.
The changes also reduced the project capex by around 28%, on an M$-per-km basis, to M$69 per km.
In late Jul-19, Malaysia’s Minister for Transport Loke Siew Fook said China Exim Bank would finance around 85% of the project. Muhyiddin Yassin has since become prime minister, taking over Mahathir’s duties on 1-Ma-20.
ECRL’s first 330km phase, from Kuala Lumpur to Kuantan on the eastern coast, was scheduled originally to be completed by 2024. The completed rail line would also transport freight between Port Klang – 50km south west of Kuala Lumpur – to Kuantan.
MOU SIGNED FOR MALAYSIA WTE IN PULAU BURUNG
A PLB Engineering subsidiary signed a memorandum of understanding (MoU) with Welle Environmental & Renewable Energy to develop a municipal solid waste to-energy (WtE) plant on the northwest coast of Peninsular Malaysia. PLB Terang (PLBT) and Welle aim to develop the 1,000 metric tonnes-per-day Pulau Burung WtE plant in Penang on a build-operate-and-transfer basis.
Malaysian construction company PLB Engineering holds a 65% equity interest in subsidiary PLB Terang. The Welle Environmental Group is based in Changzhou, China, meanwhile Welle Environmental & Renewable Energy is an entity incorporated in Malaysia.
Welle has agreed to acquire a to-be-negotiated number of shares in PLB Terang. The company has also agreed to procure the entire funding cost. Welle and/or its related China company have agreed to finance all technology development costs.
In exchange, PLB Terang has agreed to vie for a waste disposal concession of not less than 25 years from the Government of Penang with “suitable tipping fees”. The company also has agreed to sign a power purchase agreement with the Government of Malaysia. PLB Terang also needs to identify, propose and procure a suitable site for the project at Pulau Burung landfill area.
Both signatories to the MoU will negotiate the investment structure of the new WtE project. The MoU signed on 9 June is valid for 6 months, or until the parties mutually end the agreement.
MALAKOFF SIGNED 55 MW SMALL HYDRO PPAS
Malaysian IPP Malakoff signed two 21-year power purchase agreements covering 55 MW of potential capacity with state-controlled utility Tenaga Nasional. Last year, the IPP had entered the 30 MW Batu Bor Hidro Sdn Bhd hydro project and the 25 MW Lubuk Paku Hidro Sdn Bhd hydro project - both in Pahang - in a competitive tender.
The projects were among 15 successful bidders in the small hydro tender. Malakoff bid MYR 0.29 (USD 0.066) per KWh for the Batu Bor hydro tariff and the same for Lubuk Paku.
The equity holders and split of the M$50,000 ($11,500) share capital are the same for both project companies as follows:
· Malakoff – 65%
· Touch Meccanica – 35%
Touch Meccanica acquired its minority stakes from Malakoff in Sep-19.
MALAYSIAN COMPANY SELLS STAKE IN 1.2 GW GAS-FIRED POWER PROJECT
Malaysian developer Tadmax Resources Bhd is selling 25% equity stake in a 1.2 GW combined cycle gas turbine power project to Korea Electric Power Corporation (KEPCO) for MYR 41.75m (USD 9.49m). After the sale, Tadmax will own 40% of the Pulau Indah, Selangor project, while Worldwide Holdings Bdh, a company owned by the Selangor state government, owns 35% and KEPCO holds the remainder. Tadmax is negotiating a total exit from the project through a further sale to WHB.
The MYR 3.3bn (USD 762m) power project is due to be commissioned in 2024. It is expected to be financed 80% via sukuk debt and 20% equity. The build-own-operate project will be operated as an independent power producer. A 21-year power purchase agreement (PPA) will be signed with Malaysian national power utility Tenaga Nasional Bhd.
In Aug-16, the Malaysian government awarded Tadamax the right to develop the project and in Nov-17, the Malaysian developer agreed to work with KEPCO as an equity and technical partner.
Tadmax, a property developer and industrial supplier, will use the funds from the sale of its stake for investment in existing and related businesses. The company expects to have a net gain worth MYR 11m on the disposal.
EXXON MALAYSIA'S ASSET SALE SLOWS
ExxonMobil’s auction of its oil and gas assets in Malaysia has slowed, and may be postponed, due to the crash in oil prices with some of the early bidders considering pulling out of the process.
In the week beginning 9-Mar-20, oil prices fell from around USD 45/barrel to around USD 35/barrel following failed production-curbing agreements between OPEC and Russia and a slowdown in demand due to coronavirus. The ongoing coronavirus pandemic has led to a sharp decline in oil demand and an oversupply in the market, so the sale process has become unviable, as the previous asset valuation cannot be justified in these volatile market conditions.
First round bidders for the portfolio include Hibiscus Petroleum, Thailand’s PTT, Indonesia-based Medco Energi, and Warburg Pincus-backed Trident Energy. Other parties to have initially shown an interested include French private company Perenco and UK-listed player EnQuest.
In Oct-19, Exxon was first reported to be looking to divest its oil and gas upstream assets in Malaysia, held via wholly owned unit ExxonMobil Exploration & Production Malaysia, as part of a wider divestiture programme.
The company operates under four production sharing contracts (PSCs) with the Malaysian national oil company, Petronas, producing about one-fifth of the nation’s oil production and about one-half of natural gas supplies to Peninsular Malaysia. Exxon Malaysia operates 34 oil and gas platforms offshore Malaysia, with participating interest in a further six fields, according to its 2018 annual report. The company, which has a 50% working interest in its Malaysia production assets, accrued 238mcfd of net gas production and 25kpd of net liquids in that period, the annual report notes.
ENGIE WINS MALAYSIAN SOLAR CONTRACT
ENGIE won a 3.2 MW rooftop solar contract from Malaysia's Mycron Steel Bhd. Under the contract, Engie is obliged to install over 8,000 panels at two Mycron facilities - Mycron Steel CRC Sdn Bhd and Melewar Steel Tube Sdn Bhd - to provide up to 70% of their power requirements.
The panels are forecast to generate 4.1 GWh of power per annum. Any surplus electricity generated during peak sunny periods will be sold into the Malaysian grid through a Net Energy Metering scheme.
In Jan-20, Malaysia awarded the right to build a 100 MW solar project in Perak state to Engie and local partner TTL Energy as part of the Large Scale Solar 3 tender.
In 2017, Engie entered into a partnership with Malaysian plantation and real estate company Sime Darby to co-develop business opportunities in solar energy and facilities management, providing services for airports, hospitals and universities, as well as to luxury retail developments and hotels.
ENGIE AND IB VOGT EYES OPTIONS FOR MALAYSIAN SOLAR FINANCING
Both France’s ENGIE Germany’s ib vogt are looking at Sukuk and project finance options to finance their winning bid of 100 MW each in Malaysia's Large Scale Solar 3 tender. The debt financing for the new project could include the Malaysian ringgit denominated Sukuk project bonds, or a more traditional project finance structure. Both have made preliminary approaches to banks.
For the last few years, Engie has been seeking to move away from thermal generation and into renewables. The company is also seeking to sell an equity stake in its Australian renewables assets. Natixis and its local, majority owned boutique, Azure Capital, are advising on the sale.
A similar strategy is being used for ib vogt. As the German company expands, it has been looking to recycle capital from other parts of its portfolio. The company has been looking to sell equity in its Australian business and late last year, the company also launched a process to find equity co-investors in a portfolio of more than 750 MW greenfield solar projects in Asia.
POWERSERAYA TO BUY HYFLUX´S POWER PLANT
YTL PowerSeraya, a subsidiary of Malaysian conglomerate YTL Power, has agreed to acquire a 396 MW combined cycle power plant in Singapore for SGD 331m (USD 235m). The plant is owned by Tuaspring, a subsidiary of troubled water management firm Hyflux, and was commissioned in 2016 as part of the Tuaspring water desalination project.
In May-19, Singapore´s Public Utilities Board (PUB) took over the operations of the desalination plant. The acquisition will comprise a payment of SGD 230m in cash and 7.54% of ordinary shares and loan notes amounting to 7.5% of the post-acquisition equi