KAB proposes RM15mil purchase of first biogas power plant

KUALA LUMPUR: Kejuruteraaan Asastera Bhd (KAB) has proposed to acquire its first biogas power plant via the acquisition of the entire equity interest in Future Biomass Gasification Sdn Bhd (FBG)for RM15mil.

The engineering and energy solutions provider said in a statement FBG, a wholly-owned subsidiary of Future NRG Sdn Bhd, owns a biogas power plant in Kedah with an installed capacity of 2.4MW.

It added that the group will benefit from long-term recurring income via FGB's existing renewable energy power purchase agreement (Reppa) with Tenaga Nasional Bhd.

The Reppa is effective for 16 years from March 2019 to March 2034, which enabled FBG to supply power to the national grid.

KAB managing director Datuk Lai Keng Onn said the addition of our first biogas power plant via the proposed acquisition of FBG will broaden its portfolio of SES assets, which currently comprises co-generation and waste-heat-recovery plants, as well as solar photovoltaic systems.

"The biogas industry has great untapped potential in Malaysia, given the vast availability of palm oil effluent as fuel, and we aim to help Malaysia and other countries in the region achieve their renewable energy goals.

"The plant would also contribute to building a stable stream of long-term income for the Group,” he added.

The group's wholly-owned subsidiary KAB Energy Holdings Sdn Bhd is expected to complete the acquisition of FBG in the first quarter of 2023.

The purchase consideration will be funded by bank borrowings and internally generated funds.