Engineering and energy solutions provider’s wholly owned subsidiary, KAB Energy (KABEH) has signed a Sale and Purchase of Shares Agreement with Future NRG to acquire the entire equity of its subsidiary, Future Biomass Gasification (FBG) and its biogas power plant asset for a total consideration of RM15 million.
The biogas power plant in Kuala Ketil, Kedah, with an installed capacity of 2.4 megawatts.
The plant captures greenhouse gases released from palm oil effluents and converts the gas into electricity using highly efficient biogas engine generators. The electricity generated by the biogas power plant is supplied to the national grid, and subsequently to nearby towns and villages under a Feed-In Tariff programme.
This agreement follows from an earlier signing of the term sheet on the proposed acquisition of the entire equity of FBG announced on 9 November 2022 and the completion of due diligence processes.
The acquisition of FBG is targeted for completion in the second quarter of 2023, and will be funded by a combination of bank borrowings and internally generated funds.
By acquiring FBG, KAB will also recognise revenue from FBG’s existing Renewable Energy Power Purchase Agreement (REPPA) with Tenaga Nasional Berhad.
For the record, the REPPA commenced in 2018 and is effective for 16 years until 2034.
Upon completion of acquisition, KAB’s Sustainable Energy Solutions (SES) segment will own its first biogas power plant. KAB’s SES portfolio currently has solar photovoltaic systems, cogeneration, and waste-heat-recovery assets in Malaysia and Thailand.