MALAKOFF Corp Bhd has entered into heads of agreement for three hydroelectric renewable energy (RE) plants with a total installed capacity of 84MW in Kuala Krai, Kelantan.
The three projects are the Kemubu Small Hydropower Plant with an installed capacity of 29MW, Kuala Geris SHP (25MW) and Serasa SHP (30MW).
In an exchange filing yesterday, Malakoff said its wholly owned subsidiaries, Tuah Utama Sdn Bhd (TUSB) and Malakoff Technical Solutions Sdn Bhd (MTSSB), had on March 21 entered into a heads of agreement with Rising Promenade Sdn Bhd (RPSB), RP Hydro (Kelantan) Sdn Bhd (RPHK) and Rising O&M Engineering Services Sdn Bhd (ROMES).
The agreement sets out the principal parameters between the parties in relation to their respective participation in the development, design, financing, insurance, procurement, construction, installation, testing, commissioning, ownership, operation, management and maintenance of the three hydroelectric RE plants.
Malakoff said TUSB will purchase 70% ordinary shares in RPHK and subscribe up to 250,000,000 preference shares in RPHK while MTSSB will purchase 70% ordinary shares in ROMES from RPSB.
In July 2018, RPHK was awarded by Kelantan’s Economic Planning Unit to undertake the project with a combined installed capacity of 84.0MW comprising three small hydropower plants located at Serasa (with installed capacity of 30MW), Kemubu (29MW) and Kuala Geris (25MW).
Malakoff said the estimated total cost of the project will be financed via a combination of the proceeds of the issuance of the Asean Green SRI Sukuk Wakalah and equity contribution based on a project financing structure with a finance-to-equity ratio of 80:20.
RPHK has entered into three separate RE power purchase agreements (REPPAs) with Tenaga Nasional Bhd (TNB) on June 23, 2021, in relation to the project for the sale and purchase of RE from the small hydropower plants to TNB for a period of 21 years commencing from the Feed-in-Tariff commencement date, it noted in the filing.
MTSSB has over 27 years of operation and maintenance experience serving a diverse clientele from power generating plants, co-generation facilities, renewable energy facilities, building facilities, oil and gas facilities, water treatment plants and port facilities.
MTSSB’s services include project planning, management and implementation; operation and maintenance; and training needs throughout the lifespan of the facilities. To-date, it has operated almost 8,000MW of various power plants and over 1,400,000 m3/day desalination plants worldwide.
On its part, RPSB specialises in developing RE projects.
Under Malakoff’s strategic transformation initiatives, it has identified small-hydro as a key growth area within its RE portfolio which is aligned with Malaysia’s Renewable Energy Roadmap (MyRER) to leverage hydro’s full potential as one of the technology-specific pillars towards achieving a low carbon energy industry.