Infrastructure & PPPs in Malaysia - Q3 2022 Update
YOG INFRA Q3 2022 insight series
MALAYSIA is seeing a focus on clean energy transition, led by state-owned national utility to develop both generation project in renewable energy sector and transmission network. In addition to implementation of large-scale utility projects (awarded under LSS schemes) , we see development in rooftop solar, floating solar, biomass, battery storage etc. Majority of investments are being done by local investors & developers in the country.
Read the key developments in Infrastructure and PPPs in Malaysia in our latest insight series
MALAYSIA INDUSTRIAL ESTATE SEEKS CHINESE INVESTORS FOR BIOMASS POWER
An industrial park in Malaysia's Sabah state is seeking Chinese investors to develop biomass power plants. POIC Lahad Datu Industrial Park is sounding out companies on its intent to launch biomass and other biofuel projects on a 2,478-acre plot of land. It estimates the total cost will be about CNY 10 Bn (USD 1.48 Bn).
The company that runs the estate is in talks with the China Development Bank to attract special loans for Chinese-invested projects within the facility. Developers of biomass-based power will also benefit from an abundance of palm oil resources surrounding the industrial park, including in Kalimantan, the Indonesian portion of the island of Borneo.
The incoming company will be allowed to use the port infrastructure, tanks, and other oil storage facilities in Malaysia. The industrial estate has a well-developed port infrastructure and is serviced by shipping lines that connect to Australia, mainland China, Hong Kong, Taiwan, South Korea, and Japan. The facilities include container, dry bulk, and liquid terminals, as well as a barge berth.
TRINA SOLAR TO BUILD 50 MW FLOATING SOLAR FARM IN MALAYSIA
China-based Trina Solar Company Limited has secured a contract from Sarawak Energy Bhd to construct a 50 MW floating solar photovoltaic (PV) farm on a hydroelectric reservoir in Sarawak, Malaysia.
The facility will be located at the Batang Ai Hydroelectric Plant and will use N-type bi-facial high efficiency PV modules and string inverters for the project. The scope of works will include assembling the MV power system, upgrading the high-voltage substation, and operation and maintenance services. The floating solar farm will be integrated with the Batang Ai power plant.
TENAGA NASIONAL PLANS USD 4.5 Bn SPEND ON DECARBONISATION
Malaysian utility company Tenaga Nasional Berhad (TNB) said it will spend MYR 20 Bn (USD 4.5 Bn) over the next 28 years as par of its energy transition plans. It aims to capture an estimated MYR 40 Bn in revenue from the domestic generation market by 2050 and is also exploring gas and hydropower projects in the Association of Southeast Asian Nations with a target to have 800 MW by 2050. Its decarbonization plan will increase the enterprise value of the generation company in case TNB decides to list the arm on the stock exchange.
In renewables, TNB’s new energy division is targeting 14.3 GW capacity by 2050 with an estimated equity investment of USD 7 Bn. The unit seeks to boost large-scale solar as well as onshore and offshore wind with a focus on existing markets in Malaysia and the UK, new markets in Spain, Ireland, France, Thailand, the Philippines, Vietnam, Australia, Taiwan, and South Korea.
RSI SECURES PPA EXTENSION FOR A 50 MW SOLAR PARK IN PERAK
Ranhill Solar I Sdn Bhd (RSI), a subsidiary of Ranhill Utilities Bhd, has secured a four-year extension of a power purchase agreement (PPA) for its 50 MW large-scale solar photovoltaic (PV) plant in Perak, Malaysia. The solar facility will be developed under the large-scale solar phase 4@MEnTARI (LSS4@MEnTARI) program.
Additionally, the financial closing date (FCD) has been extended by 3 months while the scheduled commercial operation date (SCOD) has been extended to the end of 2023.
Under the revised PPA, RSI will supply solar energy generated from the plant to Tenaga Nasional Bhd (TNB) for a period of 25 years, instead of the 21 years under the old agreement. With the extension, the facility will be operated and maintained until 2048.
MALAYSIA'S TENAGA TO INVEST USD 4.6 Bn ON GRID UPGRADE
Tenaga Nasional will invest MYR 21 Bn (USD 4.6 Bn) in the period through 2024 to upgrade Malaysia's power transmission and distribution network.
The Grid of the Future programme, run by state-owned Tenaga, will invest in smart grids to boost efficiency and focus on energy transition. The programme also involves participation from infrastructure developers and operators from Malaysia and overseas.
The need to have a modern and efficient grid has become imperative as Malaysia looks to increase its renewable energy generation. The country aims to grow renewables' share of total energy supply to 31% by 2025 and 40% by 2030, compared with the current 23%.
List of key transactions - Malaysia Q3 2022
Source: Inframation, 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 and India, we work on projects globally, and the team brings strong experience in supporting development of infrastructure projects.
©2022 YOG INFRA. All rights reserved.