Post the announcement of the shortlisted bidders for the Corporate Green Power Programme (CGPP), RHB Research (RHB) remains positive on Solarvest continuing to build recurring income via solar assets, and further strengthening its EPCC order replenishment for the next two years.
“It is well-poised to benefit from the country’s transition towards renewable energy and should stay at the forefront of the local pure-play solar EPCC sector,” said RHB in the recent Malaysia Company Update Report.
The Energy Commission shortlisted 22 solar power producers under the CGPP. The first announcement awarded a total capacity of 563.42MW, with plant capacity ranging between 7MW and 30MW.
A 21-year power purchase agreement is expected to be signed between Tenaga Nasional, selected power producers, as well as their offtakers. These plants are expected to commence operations in 2024-2025.
Solarvest, via its subsidiary/specialpurpose vehicle Atlantic Blue, Blazing Solar, and Solarvest Asset Management won three solar assets totalling 90MW under three different consortiums.
The financial details are being finalised. Shortlisted power producers are required to apply for participation in the New Enhanced Dispatch Arrangement (NEDA) programme within three months after the date of notification of the application status.
“Approvals could take 3-6 months. We expect significant recurring income contributions to kick in starting FY26. While EPCC contracts have yet to be announced, we understand that Solarvest has the first right of refusal to a total of 175MW of EPCC jobs, as it previously undertook the CGPP design and consultation work for these clients,” said RHB.
Consequently, RHB raises Target Price to RM1.53. Further upside for their Target Price should stem from recurring income from the newly secured assets.
Risks identified by RHB are such as the lower-than-expected contract wins, unexpected changes in project costs, and lack of progress in its Taiwan and Philippines overseas ventures.
