2 weeks Ago
KUALA LUMPUR: Jentayu Sustainables Bhd 's 70%-owned subsidiary Oriole Hydro Padas Sdn Bhd has entered into a power purchase agreement (PPA) with Sabah Electricity Sdn Bhd for its 162MW run-of-river hydropower development in Hulu Sungai Padas in Sipitang, Sabah. In a statement, the group said it had secured all the necessary land and resource approvals from the Sabah state government for the RM2.8bil project, representing one of the largest renewable energy initiatives in the state to-date.
The signing of the deal formalises the sale and purchase of electricity from Project Oriole to Sabah Electricity over a concession period of 40 years, on a build-own-operate-transfer (BOOT) basis. The concession period will commence from the scheduled commercial operation date of June 1, 2029, and is expected to generate about RM300mil in annual recurring revenue for the group. Under the terms of the agreement, Sabah Electricity will purchase up to 868,894 MWh annually (the annual firm energy quantity or AFEQ) at 31.
5 sen per kWh. Any generation between the AFEQ and maximum annual allowable quantity (MAAQ) of 950,222 MWh will also be purchased at the same rate, on a willing-buyer, willing-seller basis. In addition, energy produced beyond the MAAQ may be sold at eight sen per kWh, also on a willing- buyer, willing-seller basis.
According to Jentayu Sustainables, Project Oriole will also benefit from the monetisation of green attributes through Renewable Energy Certificates (REC). "The group will be entitled to receive up to RM10.1mil in REC-related income, with any excess being shared equally with Sabah Electricity," it said.
The group also announced in the same statement it had awarded the engineering, procurement, construction and commissioning (EPCC) contract for Project Oriole to a consortium led by XD Power Transmission Sdn Bhd, a subsidiary of Xi’an Electric Engineering Co Ltd, together with PT Anhe Konstruksi Indonesia and Jawat Johan Sdn Bhd. The contract covers the construction of the 162MW cascading run-of-river scheme to be developed in two sections, comprising 55MW and 107MW hydropower plants respectively Jentayu Sustainbles said the contract has been executed on a FIDIC Silver Book lump-sum turnkey structure, with a guaranteed completion timeline of 42 months from the issuance of the Notice to Proceed. Early completion will allow for an accelerated commercial operation date.
Additionally, the contract includes the development of the necessary interconnection facility communication facilities for the production and evacuation of renewable energy from the site. Jentayu Sustainables executive chairman Datuk Beroz Nikmal Mirdin said he has agreed to a moratorium period, during which he will remain as a substantial sharheolder and continue to hold an executive position within the company. He said this was in line with stakeholder expectations and ensures continuity in the execution of the group's long-term strategy.
"This commitment underscores my dedication to seeing Project Oriole and Jentayu Sustainables’ broader vision through to fruition. "With the continued support of our investors and partners, we are confident in our ability to successfully deliver on this vision and play a meaningful role in shaping Sabah’s clean energy future," he added. Trading in the shares in Jentayu Sustainables was halted from 9am to 10am on Monday, in light of the announcement.
The stock was last traded at 50 sen a share at last Friday's close..
