Tenaga Nasional Bhd
., Malaysia’s state-owned electric utility, is exploring selling a minority stake in a planned renewable energy unit to help fund its expansion into the sector, according to people with knowledge of the matter.
The Kuala Lumpur-listed power firm has asked banks to submit proposals and could raise $300 million to $1 billion from potential investors, the people said. Tenaga hasn’t picked a financial adviser yet, said the people, who asked not to be identified as the process is private.
Deliberations are ongoing and there is no guarantee that Tenaga will proceed with the stake sale, the people said.
Tenaga’s renewable energy growth strategy involves establishing a pure-play entity, Mohd Zarihi Bin Mohd Hashim, Tenaga’s chief new energy officer said in response to a Bloomberg News query. It is still at an early stage of developing its capital strategy, and expects the entity would attract investors aligned with their strategic goals, he said.
The company aims to achieve net-zero emissions by 2050 and to be coal-free by the early 2040s, according to its latest analyst presentation notes. It is currently focusing on renewable energy markets in the UK, Malaysia, Thailand, the Philippines and Vietnam.
It expects to have 0.7 gigawatts of installed renewable capacity by the end of this year, and plans to increase that to 14.3 GW by 2050, the notes show. The utility, which is looking to expand its renewables business to other markets in Europe and Asia, will invest $7 billion of equity in the space by 2050.
Tenaga, which has a market value of about 48 billion ringgit ($10.1 billion), signed a 30-year power purchase agreement, expected to begin in 2027, for a 300 megawatt hydro plant in Malaysia, according to the notes. It has bought several wind assets in the UK including a 97.3 megawatt onshore wind portfolio earlier this year, and a 49% stake in offshore wind farm company Blyth Onshore Demonstrator Ltd. in 2021. - Bloomberg
