KPower Bhd (KPower) says it signed a Large-Scale Solar (LSS) photovoltaic power purchase agreement (PPA) with Tenaga Nasional Bhd (TNB) on August 19.
The PPA agreement comes on the back of the Group’s successful bid in the LSS Phase 4 (LSS4) bidding program initiated by the Energy Commission in March 2021.
The PPA was signed through its 95%-owned subsidiary, PKNP KPower Suria Sdn. Bhd. (PKSSB). PKSSB was incorporated in collaboration with Perbadanan Kemajuan Negeri Pahang in relation to the bidding program by the Energy Commission.
Under the LSS4 program, PKSSB is mandated to design, construct, own, operate and maintain a 50MWa.c. solar photovoltaic energy generating facility in Mukim Bebar, Pekan, Pahang Darul Makmur.
The PPA governs the obligations of PKSSB and TNB to sell and purchase the energy generated by the Facility to TNB for a 21-year period from the commercial operation date in accordance with the agreed terms and conditions as stipulated in the PPA. The Facility is expected to commence operations by the second half of 2023.
Group Managing Director, Mustakim Mat Nun says closing the PPA after being shortlisted for LSS4 which signifies another accomplishment for the Group.
“This signing does not only mark our official venture into the asset ownership business model but it also indicates a mark of confidence from TNB in our expertise, and capability within the sustainable energy, utilities, and infrastructure segment,” Group Managing Director, Mustakim Mat Nun says.
“The Facility will bring a steady stream of revenue and cash flow to the Group for 21 years from the COD and we will continue to explore on diversifying our revenue from the engineering, procurement, construction, completion and commissioning segment which is mostly project based to concession-based where revenue will be derived from the sale of energy throughout the concession period.”
“The renewable energy sector’s potential continues to grow especially in line with the Energy and Natural Resources Ministry’s goal to increase installed renewable energy capacity in the country. As KeTSA projects the installed RE capacity to grow from 7,995 MW currently to 18,000 MW by 2035, more and more focus will be put on Peninsular Malaysia, as it accounts for 80% of Malaysia’s electricity demand.”
“We’re confident that with our progressive strengths and expertise in the sustainable energy, utilities and infrastructure space, we will continue to capture the undoubtedly abundant opportunities this scenario will present to us and subsequently further solidify our position as a major renewable energy player in Malaysia,” he added.
Barring any unforeseen circumstances, the execution of this agreement is expected to contribute positively to the Group’s bottom line in the long run.
