Infrastructure & PPPs in Malaysia - Q4 2021 Update
YOG INFRA Q4 2021 insight series
MALAYSIA has seen subdued, yet targeted, interventions for infrastructure development in the last quarter of 2021. There are active partnerships between local and international players for development & enablement of energy transition and urban mobility initiatives, which may be adopted at a wider scale once these interventions are successful.
Read the key developments in Infrastructure and PPPs in Malaysia in our latest insight series
PETRONAS INVITES INTERNATIONAL EOIS FOR PENGARANG LNG STORAGE
Malaysia's Petronas Gas has sought expressions of interest (EoI) from domestic and international companies for a project to build a liquefied natural gas (LNG) storage facility at a regasification terminal at Pengarang in Johor state.
Petronas Gas, a unit of national energy company Petronas, expects the facility to have a capacity of 160,000 cubic meters, the bidders can submit alternative proposals for up to 260,000 cubic meters. The selected company will assess the feasibility of developing a third LNG storage facility at the terminal, develop it and operate the storage facility including uploading of the natural gas.
The LNG terminal currently has two LNG storage tanks with a total capacity of 400,000 cubic meters and provides services including LNG regasification with a capacity of 490 MMSCFD as well as reloading, gassing up and cooling down. The new facility, to be located along a global LNG trading route, will provide customers regasification and reloading facilities, and support an anticipated increase in LNG demand in Asia as it transitions towards a cleaner energy landscape.
The development is scheduled to be completed by the fourth quarter of 2025, following a final investment decision (FID) that is likely in 2023.
SOLARVEST SECURES CONTRACT TO BUILD 50-MW SOLAR FARM
Malaysian photovoltaic (PV) plants builder Solarvest Holdings Bhd (KLSE: SLVEST) has been awarded a MYR 46.75Mn (USD 11.2Mn) contract to build a large-scale solar farm in the home country. Solarvest had been appointed by TNB Engineering Corporation Sdn. Bhd, part of national utility Tenaga Nasional Berhad, to install the plant under the Round Four of Malaysia’s Large-Scale Solar (LSS) programme.
The solar farm is set to have 50 MW of AC capacity. The project site will be located in the town of Bukit Selambau, in the Malaysian state of Kedah, where Solarvest will install about 136,890 solar modules. The solar farm is scheduled to reach commercial operation date by the first quarter of 2023.
BGRIMM FLAGS INTEREST IN GAS-FIRED AND RENEWABLE PROJECTS
Bangkok-based BGrimm Power aims to expand its renewables and conventional generation portfolio in Malaysia. It is considering acquiring a 200 MW operational gas-fired project in 2022 and an under-development 100 MW solar plant. BGrimm has also agreed to spend MYR 367Mn (USD 88Mn) to acquire a 40.6% stake in Kuala Lumpur-listed Pimpinan Ehsan Berhad (PEB), which will buy all of renewables developer reNIKOLA Holdings for MYR 373Mn.
PEB will commit to finance through an equity issuance the acquisition of at least 50 MW in solar projects that reNIKOLA aims to purchase. reNIKOLA has a current capacity of 418 MW. Malaysia plans to grow its renewables capacity to 18 GW by 2035 from the current 8 GW. The country awarded 500 MW of solar capacity in August 2021. BGrimm had a total installed capacity of 2.8 GW, including 737 MW of renewable power, as of August 2021. The company is developing power projects in Laos, Vietnam, and Cambodia.
CYPARK AND HUAWEI PARTNER ON 500 MW OF RENEWABLES
Malaysian renewable energy company Cypark Resources has signed a memorandum of understanding (MoU) with Huawei Technologies to develop renewable power projects in Asia. The companies will partner under the agreement to build projects with a total capacity of 500 MW. The two companies will develop projects in Malaysia and other parts of Asia, with a focus on Southeast Asia.
The pair intend to sign a contract following the MoU where Huawei will function as the technology partner for the projects by providing technical and after-sales support while Cypark will operate and install them. The MoU will be for a period of two years. Kuala Lumpur-listed Cypark is an environmental engineering and renewable energy company and has bid and also won solar power projects auctioned as part of the large scale solar (LSS) schemes in Malaysia.
Cypark has also developed the country's first WTE project at Ladang Tanah Merah in the state of Negeri Sembilan and also exploring developing other waste management projects in Malaysia.
CLEANTECH SOLAR SUCCESSFULLY DEPLOYS 2 MW ON-SITE SOLAR PV SYSTEM
Cleantech Solar has commissioned a 2 MW rooftop solar PV system at one of Barry Callebaut’s biggest cocoa facilities in the Asia Pacific. The project was delivered under a long-term power purchase agreement (PPA) signed between Barry Callebaut Manufacturing Malaysia, a 100% subsidiary of the Barry Callebaut Group, the world’s leading manufacturer of high-quality chocolate and cocoa products and Cleantech Solar, a leading provider of renewable energy solutions to corporations in Southeast Asia and India.
With the project fully financed, designed, installed, operated, and maintained by Cleantech Solar, this arrangement will help Barry Callebaut cut both carbon footprint and electricity cost at zero capital investment under a solar as a service model. The solar power plant’s 4,558 PV modules are expected to generate over 2,400 MWh of clean electricity in the first year of operation, which is equivalent to offsetting over 1,400 tonnes of CO2 emissions, thereby contributing to Barry Callebaut’s target to become carbon positive by 2025.
TENDERS FOR THE KLANG VALLEY MRT-3 PROJECT TO BE LAUNCHED IN 2022
The Government of Malaysia has announced that tenders for the Klang Valley Mass Rapid Transit Line 3 (MRT-3) project will be launched in April 2022 following approvals for the project’s financial projections which is expected to be completed by early 2022. The expected cost of the MRT-3 project is RM30.5 million, the same as for the MRT-2 project.
The project will follow a hybrid financing plan. Around 70–90 per cent of the total cost will be financed through an issuance of government-linked bonds by DanaInfra Nasional Bhd, a special purpose vehicle (SPV), while the remaining 10–30 per cent will be funded on a private funding initiative (PFI) basis.
The MRT 3 project will be the fifth fully automated and driverless rail system in the Klang Valley region. The route will span across 51.31 km and have 33 stations out of which 8 will be located underground while the remaining will be elevated. Construction work on the line is set to commence in 2023 and the line is scheduled to open to traffic in stages by 2027.
SIME DARBY AND TNB TO ACCELERATE THE ADOPTION OF ELECTRIC VEHICLES IN MALAYSIA
Sime Darby Motors (SDM) Malaysia has partnered with Tenaga Nasional Bhd (TNB) to accelerate the adoption of electric vehicles (EVs) and deploy a network of high-performance EV charging infrastructure in Malaysia. The partnership has been signed for a period of two years. The two firms will also explore other energy-efficient and renewable energy (RE) initiatives to optimize the cost of EV charging infrastructure.
TNB will provide its expertise for the deployment of EV charging infrastructure along major travel routes in Malaysia and support the increase of EV adoption rate. TNB will also provide electricity supply to power the EV chargers.
List of key transactions - Malaysia Q4 2021
List of Upcoming Projects - Malaysia Q4 2021
Source: Inframation, YOG INFRA analysis
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