MIDF Amanah maintains ‘neutral’ stance on power sector

KUALA LUMPUR: MIDF Amanah Investment Bank Bhd (MIDF Amanah) has maintained a ‘Neutral’ call on the power utilities sector given the stretched valuations, but still favours the renewable energy (RE) engineering, procurement, construction, and commissioning (EPCC) sub-sector as key immediate-term beneficiaries of RE initiatives.

In a note yesterday, the investment bank said the Energy Commission (EC) launched the bidding process for the 5th cycle of the Large-Scale Solar programme (LSS5).

“A total quota of 2-gigawatt (GW) quota is allocated for LSS5, making it the largest allocation within the LSS programme compared to the less than 1GW auctions in prior cycles.

“The sale of the request for proposal (RFP) documents will be open until April 16, 2024, while the deadline for submission of RFPs is July 25, 2024,” it said.

MIDF Amanah anticipates that the outcome of the bidding could be announced by year-end, providing successful bidders with sufficient time for financial close and plant construction in 2025, before the commercial operation date (COD) deadline in 2026 as set by the EC.

It said that before the COD of LSS5 plants in 2026, industry players will be kept busy with the development of corporate green power programme (CGPP) plants, expected to come online in 2025 based on the COD deadline set by the EC.

“A total capacity of 800 megawatts alternating current was awarded under CGPP, giving rise to potential EPCC jobs worth RM2.4 billion to RM3.2 billion this year,” it said. — Bernama