Malakoff Signs HOA To Undertake 3 Hydroelectric Projects In Kelantan

Malakoff had entered into a Heads of Agreement with Rising Promenade Sdn. Bhd., RP Hydro (Kelantan) Sdn. Bhd. and Rising O&M Engineering Services Sdn. Bhd. in relation to the participation in the development, design, financing, insurance, procurement, construction, installation, testing, commissioning, ownership, operation, management, and maintenance of
three hydroelectric renewable energy plants, namely Kemubu Small Hydropower Plant, Kuala Geris SHP, and Serasa SHP with installed capacities of 29.0MW, 25.0MW, and 30.0MW respectively, all located in the District of Kuala Krai, Kelantan.

Malakoff will participate in the project through the purchase of 70% ordinary shares in RPHK via its wholly-owned subsidiary,

To recap, in July 2018, RPHK was awarded by the Economic Planning Unit of the State Government of Kelantan to undertake the Project with a combined installed capacity of 84.0MW comprising three small hydropower plants located at Serasa (with installed capacity of 30.0MW), Kemubu (with installed capacity of 29.0MW) and Kuala Geris (with installed capacity of 25.0MW), collectively referred to as the “Small Hydropower Plants”.

The estimated total cost of the Project will be financed via a combination of the proceeds of the issuance of the ASEAN Green SRI Sukuk Wakalah and equity contribution based on a project financing structure with a finance-to-equity ratio (“FE Ratio”) of 80:20. Approximately eighty percent (80.0%) of the estimated total project cost shall be funded from the proceeds of the issuance of the ASEAN Green SRI Sukuk Wakalah and the balance of at least twenty percent (20.0%) thereof shall be funded by the Shareholder’s Funds partly via TUSB’s subscription of preference shares in RPHK.

RPHK entered into three separate Renewable Energy Power Purchase Agreements with Tenaga Nasional Berhad on 23 June 2021 in relation to the Project for the sale and purchase of Renewable Energy from the Small Hydropower Plants to TNB for a period of twenty-one years commencing from the Feed-in-Tariff Commencement Date.

The Project will add a capacity of 84MW to MCB’s RE portfolio and it is expected to provide MCB with a steady income flow, particularly through the dividend payment from the redeemable preference shares in RPHK.

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