Solarvest Plans to Expand Capabilities Beyond Solar, Reposition As Regenerative Clean Energy Expert In 2023

Industry and Business Landscape  

Government initiatives that encourage clean energy adoption in Malaysia. 

• Implementation of the 600MW Virtual Power Purchasing Agreement (VPPA)  quota is now open for application under the Corporate Green Power Programme  (CGPP) from 7th November 2022 to 31st December 2022. 

• This is expected to boost and replenish Solarvest’s current unbilled order book of RM662 million further. 

• The VPPA is a good step toward a digitalised clean energy industry as it requires the use of Renewable Energy Credits (RECs) to verify the source of the generation. 

• Besides, the liberalization of the renewable electricity market will create a more competitive industry landscape against grid supply, thus boosting further innovation and efficiency in the clean energy space.  

• Apart from that, the Malaysian government is planning to introduce a legal framework for monitoring the electric vehicle (EV) infrastructure development. • Under Budget 2023, the proposal of a 100% tax exemption on the statutory incomes of manufacturers of EV chargers, as well as a 100% Investment Tax  Allowance from the year of assessment 2023 until 2032 will also support  Solarvest’s venture into green mobility. 

ESG compliance is set forth as a key theme in Malaysia’s pathway towards a low-carbon economy. 

• In addition to Bursa Malaysia Securities Berhad’s recent reinforcement of the sustainability reporting on the Main Market and ACE Market’s listing requirements, its upcoming introduction of the voluntary carbon market (VCM)  exchange by the end of this year will better facilitate corporations’ voluntary climate commitments and decarbonisation journey. 

• As corporations are able to transact high-quality carbon credits at transparent prices, the VCM will act as a catalyst to encourage green investments in reducing carbon emissions. 

• At large, the accelerating ESG momentum with greater adoption of clean energy will certainly be an important lever in driving the growth prospects of  Solarvest. 

Potential in green technology developments bodes well with our clean energy journey. 

• Under the Incentive-Based Regulation (IBR) framework, Tenaga Nasional Bhd  (TNB) has allocated RM21 billion in investment between 2022-2024 to develop grid infrastructure to enhance its transmission and distribution network readiness and reliability. 

• This will modernise Malaysia’s grid system and enhance connectivity from energy generation to delivery and distribution.  

• To add, the extension of the Green Investment Tax Allowance (GITA) and  Green Income Tax Exemption (GITE) by another two years to 2025 will spur further innovations in green technology projects. 

Softening cost pressures as panel prices stabilise. 

• With China’s aggressive multi-billion-dollar expansion of polysilicon production capacity, the supply-demand dynamic of polysilicon is expected to be improved. 

• In fact, panel prices are gradually stabilizing in which Solarvest is anticipating an improvement in the procurement disruptions faced by the solar industry.  

Business Updates and Future Plans 

New brand promise to solidify our foothold in the clean energy space. 

• As we introduce the new brand promise of Energizing The Next, we plan to expand our capabilities beyond solar and reposition Solarvest as a regenerative clean energy expert. 

• By venturing into a vertical expansion across the clean energy ecosystem,  Solarvest will be able to diversify our income sources and focus on increasing our recurring income stream.  

The launch of EV solutions to expand into new clean energy verticals. 

• In December 2022, Solarvest launched an EV charging and mobility solution  called “Powerbee”.  

• At the initial stage, Solarvest will build, own and operate EV charging stations in residential, commercial, and industrial developments, as well as in public  locations including highways. 

• Leveraging on our existing renewable assets and expertise in solar, we will be focusing on higher value engineering projects on fast charging and tech value add services to our clients.

Steady progress across our EPCC projects timeline in supporting our bottom-line growth. 

• As we are granted a 4-year PPA extension for all three of our assets awarded under the Large-Scale Solar 4 (LSS4), it is expected to push our project IRRs to a healthier level. 

• We are also targeting to complete two of the projects by March 2023 and therefore the revenue contribution from electricity sales is expected to subsequently increase. This bodes well with our target to achieve a recurring income of 30%. 

• The 3 LSS4 plants will contribute further to our bottom-line growth, as we are projected to earn a profit after tax of around RM9 million per annum once they are operational in 2023 and 2024. 

Spreading our geographical footprint in diversifying our income base. 

• Following Solarvest’s geographical expansion into the Asia-Pacific (APAC) markets of Taiwan, Philippines, Indonesia, and Borneo, we are seeing positive progress and it is expected to improve our fundamentals for the years to come.

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