TNB enters into Asean’s first multilateral energy pact

Malaysia, represented by Tenaga Nasional Bhd (TNB), signs an energy purchase and wheeling agreement in Manila to buy power from Laos through Thailand's existing transmission network. Seated are Electricite du Laos (EDL) managing director Bounoum Syvanpheng (left), Electricity Generating Authority of Thailand (EGAT) governor Kornrasit Pakchotanon (second from left) and TNB CEO and president Datuk Seri Azman Mohd (second from right).

KUALA LUMPUR: In the first multilateral energy exchange or trading in Asean, Tenaga Nasional Bhd (TNB) has agreed to buy up to 100 MW of electricity from Laos using the transmission grid of a Thai state enterprise.

In a filing with Bursa Malaysia, the national utility company said it signed an energy purchase and wheeling agreement (EPWA) on Wednesday to buy electricity from Laos' state-owned power company Electricite Du Laos (EDL) via the existing transmission grid of Electricity Generating Authority of Thailand (EGAT).

Without disclosing the price, TNB said it was under no obligation to purchase any minimum amount of energy from EDL.

The EPWA governs the obligations of the parties to sell, wheel and purchase of energy from EDL via EGAT (the wheeler) to TNB for a two-year period (Jan 1, 2018 until Dec 31, 2019) based on the agreed terms and conditions. 

TNB said the signing of the EPWA would not have any effect on its issued share capital and the substantial shareholders’ shareholdings and would have a neutral impact on the earnings of TNB over the term of the agreement.

None of TNB’s directors or major shareholders and/or persons connected with them has any interest, direct or indirect, in relation to the transaction.

Asean is working towards setting up arrangements for electricity and natural gas within the region through the Asean Power Grid and Trans-Asean Gas Pipeline.

The Asean Power Grid initiatives have been ongoing since the last 20 years. However, only bilateral agreements had been implemented between two neighbouring countries.

The idea to jump start electricity trading beyond neighbouring borders was mooted by Laos, Thailand, Malaysia and Singapore during the Special Senior Officials Meeting on Energy in Manado, Indonesia in December 2013.