Muted impact on TNB and Malakoff shares
This is despite IPP project cancellations
PETALING JAYA: Amid the unabated selldown in global markets, the cancellation of four independent power producer (IPP) projects was absorbed by the market without much of a fuss.
Shares of both Malakoff Corp Bhd and Tenaga Nasional Bhd (TNB), which are the listed companies affected by the cancellation of the IPP projects, saw relatively muted reactions.
Malakoff lost four sen or 4.65% to 82 sen and TNB closed 10 sen or 0.72% higher to RM14.00 despite the negative broader market performance yesterday.
Market observers said the macro picture took bigger precedence than the news of the cancellation, which would have otherwise shown more impact had the markets behaved ordinarily yesterday.
An analyst from a local research house said that this development had no material impact on TNB or Malakoff because it was only at the proposal stage.
“It has not been firmed up yet, so there is no impact actually,” he said.
It was reported that among the four, a 700MW power plant project by Malakoff and TNB in Kapar has been cancelled.
Energy, Technology, Science, Climate Change and Environment Minister Yeo Bee Yin said the cancellations were due to non-compliance of conditions stipulated in the offer letters from the developers.
She was reported as saying at a Parliament question-and-answer session that the other projects were the 1,400MW power plant by Aman Majestic Sdn Bhd and TNB in Paka, Terengganu, a 300MW combined gas engine power plant project by Sabah Development Energy (Sandakan) Sdn Bhd and SM Hydro Energy Sdn Bhd at the Palm Oil Industrial Cluster (POIC) in Sandakan.
And the final cancellation was the 400MW solar energy quota to Edra Power Holdings Sdn Bhd for the development of a solar energy plant.
Yeo said the cancellations were not expected to have a negative impact on the finances and legislation of the government.
“With the cancellations, the government will save electricity supply to consumers amounting to RM1.26 bil,” she was reported as saying.
Yeo said electricity supply projects in the future would be awarded through an open tender process.
TNB already has a 2,420MW power station in Kapar, Klang, which operates on coal, oil and gas. This plant is majority-owned by TNB with a 60% stake, with the rest being held by Malakoff.