KAB eyes higher revenue from SES segment after N. Sumatera power plant acquisition

by TMR / TMRgraphic

KEJURUTERAAN Asastera Bhd (KAB) aims higher revenue contributions from its sustainable energy solutions (SES) segment after successfully completing the acquisition of its first mini hydropower plant in North Sumatera, Indonesia. 

The concession for the Kombih III mini hydro power plant is expected to generate at least RM270 million revenue for the group over the concession period of 20 years.

“With the hydropower plant in place, KAB’s revenue from the SES segment is set to double in this financial year ending Dec 31, 2022 (FY22) compared to FY21. Furthermore, the segment now has a current orderbook of RM480.6 million,” MD Datuk Lai Keng Onn said in a statement yesterday.

“We are gradually strengthening our SES segment to build a formidable recurring income stream for the group to complement our project-based engineering division and lead our transformation into an energy solutions player in the long term.

“This is in tandem with our mission of providing a cleaner and greener alternative to promote more efficient energy usage in the South-East Asia region,” he added.

KAB’s wholly owned subsidiary, KAB Energy Holdings Sdn Bhd, had entered into a Share Sale Agreement with Sarawak Cable Bhd to acquire the entire issued share capital of the latter’s subsidiary PT Inpola Mitra Elektrindo (PT IME) for RM10,000 purchase consideration. 

PT IME will be released from all liabilities and encumbrances upon full settlement of the purchase consideration and outstanding debt of up to RM75 million.

It also designed, constructed, developed and now owns and operates the Kombih III mini hydropower plant in North Sumatera, Indonesia, which commenced commercial operations in October 2021 with 11 megawatt installed capacity. Simultaneously, PT IME also began supplying electricity to Indonesia’s state-owned utility company PT Perusahaan Listrik Negara for the 20-year concession period.

Prior to acquiring the mini hydro power plant, KAB’s SES segment derived its revenue from various renewable and clean energy projects in Malaysia and Thailand, comprising solar photovoltaic systems, co-generation facility and waste-to-heat recovery systems.

The group’s SES segment made up RM6.8 million or 3.9% of KAB’s total revenue for FY21. The segment’s contribution increased to 7.6% or RM4 million for the first quarter ended March 31, 2022, alone and is anticipated to rise further.