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Infrastructure & PPPs in Malaysia - Q2 2024 Update

YOG INFRA Q2 2024 insight series

MALAYSIA is seeing development of large clean energy transition projects, with typical project sizes being 250-500 MW; jointly being invested by large international developers and local Malaysia conglomerates. We also see a growing focus on urban mobility through use of EVs in private, commercial and public transport as well as associated EV charging infrastructure.

Read the key developments in Infrastructure and PPPs in Malaysia in our latest insight for the country.

 

April 2024

PLANS ANNOUNCED TO INTRODUCE A MULTI-TIERED ART SYSTEM IN JOHOR BAHRU

The Johor government wants to develop a multi-tiered Automated Rapid Transit (ART) system in Johor Bahru to address traffic congestion in the city. The state government will be submitting a proposal to the federal government about the establishment of an elevated ART. The first automated rapid transit system in the country arrived in Johor in January 2021 for its bus pilot testing programme, and is managed by Mobilus.

Additionally, the government is also committed to transitioning its transportation system by increasing the use of electric vehicles (EVs), including electric buses (e-buses), through initiatives led by the Johor Public Transportation Corporation (PAJ). Moreover, the government has invested RM 80 Mn (USD 16.98 Mn) to purchase 60 e-buses and develop charging infrastructure to support environmental sustainability. The ART multi-carriage vehicles can carry up to five hundred passengers in five carriages, with a maximum passenger capacity of more than 300 in three carriages. The bus service includes the Larkin Sentral-Jurong East and Larkin Sentral to Boon Lay routes.


SUMITOMO, ENEOS PROGRESS ON GREEN HYDROGEN PLANT IN MALAYSIA

ENEOS and Sumitomo, in collaboration with Malaysia’s SEDC Energy (SEDCE), are working on establishing a CO2-free hydrogen supply chain in which the hydrogen produced using electricity from hydroelectric power plants is converted to Methylcyclohexane (MCH), one of the most efficient forms of hydrogen transportation, for marine transportation to sites in Japan.

The planned green hydrogen plant will produce approximately 90,000 tons per year of clean hydrogen, including 2,000 tons of hydrogen for local consumption in Sarawak. Sumitomo is leading the evaluation of the project feasibility and financing arrangements. ENEOS is in charge of the technical part of MCH production and maritime transportation to Japan while SEDC Energy is responsible for securing electricity and the technical part of hydrogen production. The partners aim to commence the commercial operation by 2030.


THE GOVERNMENT OF MALAYSIA INVITES BIDS FOR A 2 GW SOLAR TENDER

The Ministry of Energy and Natural Resources of Malaysia (KETSA) launched fifth round of the Large-Scale Solar tender (LSS5), presenting a total capacity of 2 GW. It features four packages with permitted generation capacities ranging from 1 MW to 500 MW.

  1. The first package includes 250 MW of rooftop or ground-mount solar plants, with permitted generation capacities of 1 MW to 10 MW. It is open to companies with at least 51% Bumiputera ownership that are registered as a small- and medium-size enterprises (SME) with SME Corp Malaysia.

  2. The second package includes 250 MW of rooftop or ground-mount solar, but with permitted generation capacities of 10 MW to 30 MW. It is open to companies that have at least 51% Bumiputera ownership, or from consortia with at least one Bumiputera company holding at least 51% equity.

  3. The third package covers 1 GW of rooftop or ground-mount solar power plants, with permitted generation capacities of 30 MW to 500 MW.

  4. The fourth package features 500 MW and covers floating solar plants with permitted generation capacities of 10 MW to 500 MW.


The final two packages are open to companies that are incorporated in Malaysia with a minimum 51% local Malaysian equity, or consortia where at least one member is company incorporated in Malaysia, with at least 51% local Malaysian equity.


MOU SIGNED FOR SOLAR POWER DEVELOPMENT IN MALAYSIA

Japan-based Shizen Energy has signed a memorandum of understanding (MoU) with Majuperak Holdings Bhd for the development of solar power in Perak state, Malaysia. The MoU outlines collaboration in developing ground-mounted solar power projects and assessing potential sites for floating solar projects within Perak.

Under the MoU, the parties will embark on joint ventures to develop ground-mounted solar projects, conduct feasibility studies on floating solar projects, and explore co-funding opportunities. The collaboration aims to bolster renewable energy infrastructure, create job opportunities, and facilitate technology transfer, fostering economic prosperity and sustainable growth in the region. The collaboration between Shizen International and MHB signifies a strategic alliance aimed at driving renewable energy adoption and fostering a sustainable environment for future generations in Malaysia.


May 2024

FIRST PHASE OF PASSENGER OPERATIONS UNDERWAY AT SULTAN ISMAIL PETRA AIRPORT

Malaysia Airports Holdings Berhad (MAHB) has commenced operations on Phase 1 of the new terminal at Sultan Ismail Petra Airport (LTSIP) in Pengkalan Chepa, Kota Baru. The new terminal is expected to handle 30 to 35 flights and accommodate 4,000 to 4,500 passengers daily.  The upgraded facilities at LTSIP include more aerobridges compared to the old terminal, which had only three, along with a dedicated route for international passengers.

The new terminal is equipped with over 20 flight counters, an elevated car park, a dedicated taxi driver route, a fire and rescue station, a larger apron area and a cashless operating system for passengers’ convenience. The new LTSIP terminal, he added, has not been classified as an international airport as it has not scheduled any international flights and must fulfil several criteria to do so. The RM 440 Mn (USD 93.41 Mn) LTSIP expansion and upgradation project aims to boost the terminal’s capacity from 1.5 million to four million passengers per year.


SOUTH KOREA BASED DEVELOPER TO BUILD MAGLEV LRT SYSTEM IN MALAYSIA

Permodalan Kedah Bhd (PKB) has signed a memorandum of understanding (MoU) with South Korea-based Royal Eco Train Development (RETD Korea) to develop a magnetic levitation (maglev)-based light rail transit (LRT) system on Langkawi Island, Malaysia. 

Further details on the project are awaited, however, the initial route is planned from the Kuah Ferry Terminal to Cenang Beach. This project will be implemented in phases before being expanded to other tourist destinations in Langkawi.

 

ENGIE AND UAC BHD SIGNS A 20-YEAR SOLAR PPA IN MALAYSIA

Engie and UAC Berhad, a Malaysian manufacturer of eco-friendly cellulose fibre cement products, have signed a 20-year PPA. They will develop a 7.35 MW rooftop solar array at UAC Berhad’s manufacturing plant in Ipoh. The array is expected to supply 27% of the energy needs of UAC’s facility. The two parties have been working together to reduce carbon emissions at UAC Berhad’s manufacturing plant, located in Tasek Industrial Estate, since 2018. They previously revamped the facility’s compressed air system, which led to an 18% increase in the system’s energy efficiency by mid-2019.

The collaboration between ENGIE and UAC extends beyond the solar initiative. In 2023, both entities entered a 10-year energy efficiency performance agreement aimed at revamping and optimizing UAC’s steam boiler system, poised to save up to 5,360 tonnes of CO2 annually, equivalent to planting close to 90,000 trees. The latest solar initiative marks an expansion of ENGIE’s support for UAC, transitioning from providing utilities-as-a-service to generating green energy. With all three energy solutions in place, an annual savings of over 13,000 tonnes of CO2 is projected, equivalent to planting over 200,000 trees.

The collaboration aligns with Malaysia’s Energy Efficiency and Conservation Bill passed in 2023, aimed at reducing energy consumption and costs for industrial and commercial users. Through sustainable energy initiatives, UAC sets an example for manufacturers in Malaysia, simultaneously enhancing operations and advancing sustainability goals. This partnership underscores both companies’ commitment to supporting Malaysia’s pledge under the Paris Agreement to reduce carbon emissions by 45% by 2030, highlighting the pivotal role of private sector collaboration in achieving national sustainability targets.


SOLARVEST TO PROVIDE ROOFTOP SOLAR PV SYSTEMS AT SCIENTEX’S SITES IN MALAYSIA 

Scientex Bhd has selected Solarvest Holdings Bhd for a project of about 21 MW of rooftop solar photovoltaic (PV) systems across the group’s facilities in Malaysia. The contract covers ten manufacturing plants and Scientex’s headquarters. The project, scheduled to commence in May 2024 and expected to be completed by January 2025, aims to generate enough renewable energy to offset approximately 14,000 tonnes of CO2 equivalent (tCO2e) annually.

Scientex has been transitioning to renewable energy (RE) since 2022 as part of its carbon footprint reduction strategy. With the commissioning of the new capacities, more than 80 % of the company’s manufacturing sites in Malaysia will use RE with solar systems. This agreement is for the provision of engineering, procurement, construction, installation, testing and commissioning for rooftop solar PV system under self-consumption and net energy metering scheme for eight identified sites.


June 2024

MALAYSIA STATE DISCUSSES GREENFIELD PROJECT WITH HENAN AIRPORTS

 The Kedah State Government through KXP Airport City Holdings Sdn Bhd (KXP) is engaged in discussions with a potential strategic partner for the proposed Kulim International Airport (KXP) project. The discussions focused on various aspects of strengthening collaboration to advance the KXP project, which is planned to be developed in Sidam Kiri, Kuala Muda. KXP Airport City is a subsidiary of Kedah State Development Corp, which operates Kedah Aerotropolis.

Malaysia Airports Holdings Bhd or MAHB has  signed a memorandum of understanding with China Henan Aviation Group Co Ltd to enhance air cargo connectivity and logistics between Malaysia and China. The agreement will improve the efficiency and reach of both airport operators by establishing new air cargo routes between Zhengzhou Xinzheng International Airport and Kuala Lumpur International Airport. The KXP project has been a long-awaited initiative. The concept of a new international airport in Kedah was first proposed in 2013 during the Kedah Transformation Lab.


UEM GROUP TO DEVELOP 500 MW SOLAR PLANT IN MALAYSIA

Malaysia’s UEM Group has signed an agreement, through its subsidiary, to develop a 500 MW hybrid solar power plant in partnership with Blueleaf Energy and ITRAMAS Corporation. This will be the second such project to be developed by UEM Lestra and its partners as part of the one-gigawatt (1 GW) hybrid solar power plant flagship venture under the National Energy Transition Roadmap (NETR) announced by the Malaysian Government back in July 2023.

UEM Lestra, through their partnership with Blueleaf Energy, a Macquarie Asset Management portfolio company, and ITRAMAS, has made significant strides in the development of the one-gigawatt (1GW) hybrid solar power plant including site identification, strategic offtake and commercialization partnership discussions, and technical project specifications.  The parties will work together with the government on the details of the third-party access (TPA) framework that will be required for the project to move to the execution phase.

Blueleaf Energy together with other NETR initiatives, this project is poised to enhance green economic activity, create local supply chain ecosystems, and propel Malaysia to become a leader in ASEAN’s decarbonization efforts and energy transition.


PARTNERS TO EXPAND EV CHARGING INFRASTRUCTURE IN MALAYSIA

Malaysian conglomerate Sunway Group (Sunway), digital communications technology firm Huawei Technologies (Malaysia) Sdn Bhd (Huawei Malaysia), and electric vehicle charging solutions firm ChargeHere EV Solution Sdn Bhd (ChargeSini) have teamed up to expand EV charging infrastructure in Malaysia. The trio have signed a memorandum of understanding (MoU) for the development and rollout of more EV charging stations at Sunway-owned premises, commercial buildings and residences nationwide.

Through this collaboration, ChargeSini, one of Malaysia’s biggest EV charging solution providers, will procure, install and manage the operation of EV charging stations at strategic locations across Sunway’s integrated townships and developments nationwide. Malaysia’s automotive industry is securing its place in the EV ecosystem with its progress in the electric transition journey. ChargeSini is committed to creating an efficient EV charging network that will benefit communities across Malaysia and beyond.

Sunway Group is one of Southeast Asia’s leading conglomerates with 13 business divisions across more than 50 locations primarily in Asia. The firm has three public-listed companies — Sunway Berhad, Sunway Construction Group Berhad, and Sunway REIT. Huawei is a leading global provider of information and communications technology (ICT) infrastructure and smart devices. The firm operates in more than 170 countries and regions. ChargeSini is a leading provider of EV charging solutions in Malaysia. The firm has successfully established over 720 charging ports nationwide within 18 months.


CRCC DELIVERS THE FIRST SET OF TRAINS FOR THE GEMAS-JOHOR BARU PROJECT 

CRRC Zhuzhou Locomotive Company Limited has delivered the first set of electric trains (ETS3) for the Gemas-Johor Baru Electric Double Track service in Malaysia. The trains were handed over to the Ministry of Transport (MoT).

The new ETS3 trains, which feature a seating capacity of 312 seats, including thirty-six business class and 276 standard seats, will enhance travel between Kuala Lumpur Sentral and Johor Baru once the track is completed by 2025. A total of eight trains will be assembled in Malaysia, with the first two sets shipped from China. The expected delivery for all trains is by August 2025.

The Gemas-Johor Baru project, which includes 192 km of track and eleven stops, will enhance connectivity through major districts in Johor, ultimately reducing travel time between KL Sentral and JB Sentral to three hours and 30 minutes at speeds of 140 km/hr.

 

List of key transactions - Malaysia Q2 2024

Source: YOG INFRA analysis

 

ABOUT YOG INFRA

Our objective is to drive economic growth and make positive social impact through sustainable infrastructure development.

​YOG INFRA is an infrastructure focused financial advisory firm. We work with Developers and Development Finance Institutions (DFIs) and help them make informed investment decisions across infrastructure development lifecycle.

With our offices in Singapore, India and UAE, we work on projects globally, and the team brings strong experience in supporting development of infrastructure projects.


For more information about us, our service offerings and team, please visit www.yoginfra.com Contact us at info@yoginfra.com

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