MK Land targets RM5m revenue from RE business

by HIDAYATH HISHAM

PROPERTY developer, MK Land Holding Bhd, targets to generate a revenue of RM5 million from its nascent solar energy venture this year.

Its renewable energy (RE) journey began when approached by international investors to lease land for large-scale solar (LSS) projects under the Malaysian government’s LSS schemes. This led to MK Land establishing its own RE division under its subsidiary Solar Citra Sdn Bhd.

The company’s flagship solar project, also named Solar Citra, is an 11MW solar plant in Bandar Teknopolis in Perdana, Perak.

Building on the momentum, and with Solar Citra now operational, MK Land RE manager Natasha Alya Edmett said the company is targeting an annual revenue of about RM5 million from the project alone.

MK Land posted a net profit of RM3.3 million on a revenue of RM155.1 million for the first nine months ended March 31, 2024, compared to a net profit of RM5 million, and a revenue of RM144.9 million in the same period last year.

Solar Citra accounted for RM3.3 million or just over 2% of the revenue in the first nine months in FY24. In that period, the big bulk of its revenue, at RM133.4 million accounting for 86%, came from property development followed by leisure segment at RM18.6 million (12%).

In its exchange filing, MK Land said the outlook for the RE industry in Malaysia remained optimistic with the government’s effort to increase its RE capacity to 31%

by 2025 and 40% by 2035 with solar energy becoming the dominant RE resource. On that note, it said the group remained positive on its RE segment which was expected to contribute positively to the recurring revenue stream in the long run.

At this juncture, the company’s expansion plans included exploring the potential for floating solar projects on Bukit Merah Lake, part of MK Land’s Bukit Merah Laketown Resort.

Natasha Alya said, while RE is new and exciting, the industry is still figuring out certain aspects.

To mitigate these challenges, MK Land has adopted a cautious approach, continuously assessing risks and implementing strategies to ensure operational resilience.

Despite the focus on RE, MK Land remained firmly rooted in its core business of property development.

Natasha Alya said the company aimed to contribute to the national agenda while remaining cautious in its approach to each project.

Looking ahead, she said MK Land aimed to secure at least 250MW of RE projects to solidify its position as a player in the Malaysian RE sector.

MK Land had completed its maiden LSS photovoltaic plant which began to commission on May 30, 2023.

“The RE sector has proven to be dynamic and exciting, and we seek to explore other ventures in this field,” said MK Land executive chairman Felina Mustapha Kamal in the company’s annual report for 2023.

On Aug 8, 2022, the Energ y Commission Malaysia granted an extension on the financial close date, an extension on the scheduled commercial operation date to Dec 31, 2023, and an extension on the power purchase agreement with Tenaga Nasional Bhd from 21 years to 25 years to all participants in the fourth round of the LSS4.

Together with the assistance of the engineering, procurement, construction and commissioning contractor, the plant achieved its initial operation date on May 21, 2023, followed by the commercial operation date on May 30, 2023, according to details in its annual report.

This is said to be the first venture of its kind under the LSS4 in Perak.

The company’s 2023 annual report also noted that the Malaysian government had announced in august 2022 several initiatives to support the nation’s transition towards sustainable energy. One of the initiatives was the corporate green power programme (CGPP), which allowed solar power producers to develop, finance, design, supply, instal, operate and maintain a LSS photovoltaic plant in Peninsular Malaysia.

Under the CGPP, solar power producers shall achieve the scheduled commercial operation date by Dec 31, 2025, and supply energy via the electricity utility company in Peninsular Malaysia through the virtual power purchase agreement with the corporate consumer on mutually agreed terms and conditions and price structure.

It noted that Solar Citra has formed a consortium with a French-based multi-energy company, TotalEnergies Renewables SAS as a solar power producer. On May 9, 2023, the consortium submitted an application to participate in the CGPP for the proposed development of a large-scale solar photovoltaic plant at Mukim Padang Meha in Kulim, Kedah.

The counter closed at 21.5 sen on June 6, valuing the company at around RM278 million.


  • This article first appeared in The Malaysian Reserve weekly print edition