TNB launches Vantage RE to accelerate its ESG drive

The newly established platform will own, operate and manage a portfolio of RE assets in the UK and throughout Europe

by S BIRRUNTHA / Pic Source: tnb.com.my

TENAGA Nasional Bhd (TNB) is picking up the pace on its global Environmental, Social and Governance (ESG) related efforts with the launch of a renewable energy (RE) investment and asset management company, Vantage RE Ltd.

Its president and CEO Datuk Baharin Din (picture) said the newly established platform will own, operate and manage a portfolio of RE assets in the UK and throughout Europe.

He said Vantage is set to be a vital component of TNB’s purpose-driven journey, which is anchored on the ESG practices in the Malaysian national utility’s business.

“The international RE business is a priority for TNB to thrive in the long term. In keeping with our aspiration as the leading provider of sustainable energy in Malaysia and internationally, we will continue to invest substantially in this area.

“We believe these activities will contribute extensively towards global low-carbon generation and further accelerate TNB’s commitment towards its ESG goals.

“We understand the importance of ESG to investors in line with their values and priorities of their investment decisions,” he said in a recent statement.

Baharin said the UK’s robust RE growth trajectory and supportive regulatory framework, coupled with the considerable experience gained in the country, has placed TNB in a unique position to tap into more opportunities in the region.

The power utility has been investing in the UK’s solar and wind sectors since 2017 and over the last four years, TNB has successfully secured close to 400 megawatts (MW) of RE investments in the country. With the establishment of Vantage, Baharin noted the company is on track to achieve the overall target of 8,300MW of

TNB’s RE generation capacity. Headquartered in London, Vantage will be led by Vian Davys, who has over 20 years of experience in the RE sphere in the UK and globally.

With an experienced team of local hires in the UK working alongside TNB’s Malaysian talents, Vantage is set to position itself swiftly for growth in the market, consistent with TNB’s position as an experienced and reliable player in the UK’s energy sector.

The immediate growth plan of Vantage will be focused on the acquisition of subsidised Renewable Obligation Certificates (ROCs) and Feed-in-Tariff (FiT) assets across the UK and Ireland.

In May this year, Vantage successfully completed the acquisition of an additional onshore wind turbine with revenue contracted under the FiT scheme, bringing the total wind capacity in the company to 26.6MW.

In addition to its existing assets, Vantage has also built a sizable acquisition pipeline of operational assets including those to be acquired via competitive bidding.

TNB CIO Shahazwan Harris said this pipeline offers a solid and steady pathway for Vantage to acquire more assets in the UK and Europe and signals TNB’s determination to grow its RE business.

“We are open to exploring opportunities with equity partners who are interested to join us as we accelerate our international business growth.

“We believe this new platform presents an attractive value proposition for strategic and financial investors seeking exposure to stable yielding assets, besides committing to ESG goals,” he noted.

TNB’s RE footprint in the UK began in 2017 when it invested in Vortex Solar UK Ltd, a 50% equity interest in one of the largest solar platforms in the UK with the ROCs subsidy scheme.

In 2018, TNB’s RE business portfolio there expanded with the purchase of GVO Wind Ltd and Bluemerang Capital Ltd.

These assets now operate under Tenaga Wind Ventures UK Ltd (TWV), a wholly owned subsidiary of TNB and hold the largest FiT wind portfolio in the UK.

In 2020, TNB acquired the remaining 20% stake in the wind assets under TWV and an additional 5% of Vortex’s controlling stakes, thus, emerging as the sole and majority shareholder of the respective companies.

This was a move going beyond holding equity, allowing greater management and operational control by TNB of these RE businesses, and augmenting TNB’s ESG journey.

Despite the Covid-19 pandemic and its effect on the world, the UK RE assets have remained resilient, contributing solid operational margins through active asset management initiatives.

Looking ahead, Vantage is set to grow and realise its full potential as a global RE player, supported by conducive government policies, growing global ESG demand and rapid preference for RE as the “mainstream” energy source.