TNB inks two solar power agreements

KUALA LUMPUR: Tenaga Nasional Bhd (TNB) inked on Thursday large-scale solar (LSS) photovoltaic power purchase agreements (PPAs) with two special-purpose companies (SPCs).

In a filing with Bursa Malaysia, the utility company said the SPCs - UITM Solar Power Sdn Bhd and its own unit TNB Sepang Solar Sdn Bhd - were set up by companies that won in the Energy Commission’s competitive bidding exercise last year to develop transmission-connected LSS projects.

UITM Solar Power is set up by Consortium UITM Property Management Sdn Bhd, BJ Power Co Ltd and Perwira Al-Syura Consulting Engineers Sdn Bhd.

Each of the SPCs will design, construct, own, operate and maintain a solar photovoltaic energy generating facility with the approved capacity (50 Mwac) at its proposed location.

UITM Solar Power will build its facility in Gambang, Pahang, while TNB Sepang Solar will build its plant in Sepang. Both facilities are scheduled to start commercial operations on Nov 1, 2018.

The PPAs govern the obligations of the parties to sell and purchase the energy generated by the facilities for a period of 21 years from the commercial operation date in accordance with the agreed terms and conditions. 

No contract value was disclosed.

TNB said it expected to execute PPAs with the remaining bidders soon.

The signing of the PPAs will not have any effect on the issued and paid-up share capital and the substantial shareholders’ shareholdings of TNB and will have a neutral impact on the earnings of TNB over the term of the contracts.