KAB Energy Holdings Sdn Bhd, a wholly-owned subsidiary of Kejuruteraan Asastera Bhd (KAB), has received approval from its shareholders to acquire a mini hydropower plant in Indonesia.
KAB, an engineering and energy solutions provider, announced that the proposal was passed at an EGM held on the acquisition of PT Inpola Mitra Elektrindo (PT IME) . The latter owns and operates an 11MW mini-hydropower plant located in the District of Pakpak Bharat, North Sumatera.
PT IME had developed, owned, and operated the power plant under a power purchase agreement (PPA) with PT Perusahaan Listrik Negara (PLN), the state-owned electricity company of Indonesia. The PPA has an initial concession period of 20 years from the commercial operation date, which started on Oct 12, 2021.
After the proposed acquisition is completed, KAB is expected to receive a stable and recurring income stream from the mini hydropower plant. This move is aligned with KAB’s business strategy of expanding its suite of solutions for the Sustainable Energy Solutions (SES) segment to meet its customers’ growing needs.
According to KAB group MD Datuk Lai Keng Onn, the proposed acquisition is an exciting milestone for KAB as it provides a stable recurring source of income to the group and gives a direct foothold in the lucrative hydropower industry.
He also stated that the group is committed to pursuing larger and more ambitious sustainable energy projects to drive the growth of the SES segment as global demand increases.
The group expects the SES segment to be the main contributor and eventually achieve more than 50% operating profit contribution in the foreseeable future.