Malakoff in maiden local RE project
PETALING JAYA: Independent water and power producer Malakoff Corp Bhd is set to embark on its first renewable energy (RE) project in the country, as it seeks to expand its presence in the industry domestically.
Yesterday, the power producer signed a memorandum of understanding (MoU) with Touch Meccanica Sdn Bhd (TMn) to codevelop two energy projects, namely large scale solar photovoltaic and mini hydro power in Pahang, with an estimated total development cost of RM1.3 billion.
TMn is a wholly owned subsidiary of Touch Group Holdings Sdn Bhd, which is involved in the development of renewable energy especially in the areas of small hydro and solar power generation.
Speaking to reporters after the signing ceremony, Malakoff CEO Datuk Ahmad Fuaad Kenali said the group expects a high single-digit, close to double-digit returns from the project investment.
“We want to expand more on renewable energy because the size of (generation) portfolio within our group is kind of small now. Currently we only have one renewable energy project in Australia,” he said.
Malakoff currently owns a 50% stake in Macarthur Wind Farm in Victoria, Australia, with a generation capacity of 210 megawatt (MW).
“But we are not rolling anything out at the moment as we want to focus on Malaysia and those areas which are closer to home,” he added, noting the group is on track to increase its energy capacity to 10,000MW by 2020.
Currently Malakoff is the largest independent power producer in Southeast Asia with a net generating capacity of 6,346MW from its seven power plants.
Under the MoU, both companies are planning to develop a 100MW mini hydro power project with an estimated cost of development close to RM1 billion. For the 50MW integrated solar farm, Ahmad Fuaad said the development cost will be up to RM300 million.
The development cost will be financed via a combination of borrowings (70%) as well as internal generated funds (30%).
Ahmad Fuaad noted that the solar project is expected to take about a year to be completed from the commencement date after getting approval from the authorities, while the mini hydro project will take about two years to complete the first plant.
Meanwhile, TMn CEO Tengku Datuk Abdul Aziz said the group has identified five locations in the areas of Bera, Maran and Pekan for the development of the mini hydro project.
“For the integrated solar farm, it will be somewhere in the area of Semuji, Gambang site,” Abdul Aziz added, noting that TMn has an extensive land bank and state approved locations for the projects development along Sungai Pahang and Semuji.