1MDB plans giant solar farm

Powertek Bhd's third power plant at Telok Gong, Melaka

PETALING JAYA: 1Malaysia Development Bhd (1MDB) is believed to have formed a 60:20:20 joint venture to undertake the country’s largest 50MW solar farm in Kedah.

Sources said 1MDB would be taking a 60% stake, with Tenaga Nasional Bhd (TNB) taking a 20% stake and the remaining 20% believed to be taken by its technology provider, a US-based company.

1MDB did not get back to StarBiz queries as at press time.

StarBiz earlier reported that 1MDB had secured a tariff rate of between 40 sen and 46 sen per kWh. The rates are lower than the existing tariff for electricity generated by solar plants.

1MDB’s feed-in-tariff rates of between 40 sen and 46 sen seem to be in line with Sustainable Energy Development Authority (Seda) Malaysia’s pricing trends.

Seda’s FiT rates have been designed to be reduced to reflect the declining trend of solar (and other renewable energy types) equipment and technology.

Last month, 1MDB announced that it had won yet another power project following the signing of a 25-year power purchase agreement (PPA) with TNB.

TNB said it had signed a PPA to buy power to be generated by 1MDB Solar Sdn Bhd’s solar photovoltaic (solar PV) plant in Kedah.

TNB said the PPA provided for 1MDB to design, construct, own, operate and maintain a solar PV plant generating facility with a capacity of 50MW alternate current (MWac).

1MDB’s proposed 50 MW solar farm was the result of a “direct negotiation” with the Government. It will also become by far the largest in the country.

It is also understood that 1MDB’s power plant agreement with the Government came about as a result of direct negotiations between 1MDB and the Energy, Green Technology and Water Ministry, with both the Energy Commission and Seda Malaysia playing a smaller role.

Meanwhile, sources said 1MDB might postpone its plan to list its energy unit.

1MDB has been on a buying spree of power assets over the last two years totalling RM12bil. The listing is expected to raise some US$2bil (RM6.4bil).

It currently owns Tanjong Energy (now known as Powertek Energy Sdn Bhd), a 75% stake in Genting Sanyen Power (now known as Kuala Langat Power Plant or KLPP), and a 75% stake in the coal-powered Jimah Energy.

1MDB is reportedly eyeing a power plant in India to expand its power generation business ahead of its proposed listing.