Tenaga Nasional Bhd (TNB) shares rose 2.72% to RM14.34 in afternoon trade, boosted by the utility giant’s announcement that its power generation arm, TNB Genco, had secured a 1.4 gigawatt combined cycle gas turbine (CCGT) power plant contract in Paka, Terengganu.
The rise marks a continuation of investor confidence in TNB’s long-term growth, supported by both new capacity awards and its regulated asset base. The stock saw a high of RM14.38 and a low of RM13.94 on a volume of 8.06 million shares.
TNB Genco and consortium partner Aurora Power Generation Sdn Bhd received confirmation from the Energy Commission of their successful bid under the New Generation Capacity (2025–2029) competitive tender.
The Paka facility is the only new plant awarded under Category 2 of the exercise, with construction expected to take three years and commercial operation targeted for 2029 under a 15-year Power Purchase Agreement, with TNB as the offtaker.
CIMB Research estimates the plant could contribute around RM200 million in annual earnings before interest and tax (EBIT), potentially strengthening TNB’s long-term earnings profile.
Assuming an 80% stake in the project, TNB’s equity injection would be around RM1.2 billion to RM1.3 billion, considered manageable given the company’s estimated cash reserves of RM12 billion at the end of FY2025.
“This project, separate from TNB’s ongoing Paka repowering initiative, reinforces the company’s dominant position in Malaysia’s power generation sector and underlines its role in supporting energy security and economic growth,” CIMB said. The research house maintained its “Buy” recommendation with a target price of RM15.10.
TNB’s positive outlook is underpinned by regulated asset base growth, though analysts note risks from higher operating costs and potential delays in capital expenditure implementation.
