KEJURUTERAAN Asastera Bhd (KAB) is acquiring its first biogas plant in Kuala Kertih, Kedah, from Future NRG Sdn Bhd for RM15 million.
In a Bursa filing today, KAB said its wholly-owned unit, KAB Energy Holdings Sdn Bhd, signed a sale and purchase of shares agreement to acquire the entire equity of Future NRG’s subsidiary, Future Biomass Gasification Sdn Bhd (FBG), and its biogas power plant asset.
The latest agreement follows from an earlier signing of the term sheet on the proposed acquisition of the entire equity of FBG announced on Nov 9, 2022, and the completion of due diligence processes.
FBG owns a biogas power plant in Kuala Ketil with an installed capacity of 2.4 megawatts. The plant captures greenhouse gases released from palm oil effluents and converts the gas into electricity using highly-efficient biogas engine generators.
The electricity generated by the biogas power plant is supplied to the national grid, and subsequently to nearby towns and villages under a Feed-In Tariff programme.
By acquiring FBG, KAB will also recognise revenue from FBG’s existing Renewable Energy Power Purchase Agreement (REPPA) with Tenaga Nasional Bhd. The REPPA commenced in 2018 and is effective for 16 years until 2034.
The acquisition of FBG is targeted for completion in the second quarter of 2023, and will be funded by a combination of bank borrowings and internally generated funds.
Upon completion of acquisition, KAB’s Sustainable Energy Solutions segment will own its first biogas power plant. KAB’s sustainable energy solutions (SES) portfolio currently has solar photovoltaic systems, cogeneration and waste-heat-recovery assets in Malaysia and Thailand. — TMR / pic futurenrg.net