Gamuda Berhad has announced that it has a joint venture agreement with 2 other entities to form UPP Holdings Sdn Bhd, to develop a hydroelectric plant in Tenom, Sabah, estimated to cost about RM4 billion.
In a Bursa listing today, the group said the JV partners are, Sabah Energy Corporation Sdn Bhd, and Kerjaya Kagum Hitech JV Sdn Bhd, with an equity interest in the JV company for 45%, 40%, and 15% respectively.
The purpose of the JV is to undertake a private finance initiative to develop the Upper Padas Hydroelectric Power Plant, a hydroelectric dam to be located in Tenom, Sabah, with a planned maximum generating capacity of 187.5MW.
“The project will be delivered via a wholly owned subsidiary of UPP Holdings, namely Upper Padas Power Sdn Bhd, which will fulfil the role of the project developer,” it said.
The total project cost is estimated to be about RM4 billion, including interest during construction.
The project, it added, will be located in Tenom and Sipitang districts of Sabah, and is estimated to have a construction period of 5 years and an initial operating period of 40 years.
The group said as part of the proposed joint venture (joint venture agreement and the project), a power purchase agreement (PPA) is to be finalised and entered into between the project developer and the off-taker, Sabah Electricity Sdn Bhd (SESB).
The project is being carried out as according to Gamuda there is a need to further increase electricity generation to ensure a stable base load, coupled with increasing demand by the industrial sector for green energy.
The statement also highlighted that Sabah currently only has less than 12% reserve margin of electricity supply. In line with Sabah Energy Roadmap and Master Plan 2040, the State currently has a dependable capacity for electricity of approximately 1,180 MW as of 2021.
“This project upon completion, will provide additional generation capacity of 187.5MW for Sabah, delivering up to 1,052GWh of clean energy per annum,” it said, adding the project is also in line with Gamuda’s long-term ESG strategy and commitment.
“The current paid-up capital of the JV company is RM1 with 1 ordinary share issued. Further capital enlargement will be done at the appropriate stage to inject funds into the project developer for it to meet the funding requirements of the project.
“The amount will be subject to final project cost and funding, including the final tariff which is currently subject to review and approval by Suruhanjaya Tenaga,” it added.
Gamuda said it will make due announcement on the tariff details and developments on the PPA once approval is obtained.
