Green energy to power Kinergy Advancement

Lai: In line with this year’s rebranding, the group envisions making its SES segment the primary focus and the results are surpassing expectations.

Kinergy Advancement Bhd (KAB), a sustainable energy solutions (SES) provider, is poised for a future of robust and stable earnings, driven by its environmentally conscious offerings.

Thanks to the nature of its business, which is primarily centred around concessions, the group is positioned favourably in the evolving landscape of renewable energy.

In a world increasingly committed to sustainability, KAB has transformed into a provider of sustainable solutions, leveraging expertise in areas such as solar, mini hydro and waste heat recovery.

By entering into strategic partnerships and securing concessions for renewable energy projects, the group not only contributes to a cleaner planet but is also able to develop a resilient and steady revenue stream.

KAB executive deputy chairman and group managing director Datuk Lai Keng Onn expresses confidence in the group’s performance, affirming that it is “on the right track”.

“In line with this year’s rebranding, the group envisions making its SES segment the primary focus and the results are surpassing expectations,” Lai, who is also the founder of the company, says.

To recap, in June, KAB rebranded from Kejuruteraan Asastera Bhd, signifying its commitment to expanding its SES business regionally.

Lai points out that although the group’s SES segment only contributes about 15% to its total revenue, in terms of profit, the segment accounts for over 50%, thanks to its favourable profit margins.

He expects future growth, particularly in the bottom line, to be anchored by the group’s SES operations.

“The majority of our assets are operational and we expect further expansion with the completion and incorporation of two additional assets – the Indonesian mini hydro plant and biogas plant – in the second half of the year,” he says.

He adds that these assets provide the group with concession-based income with tenures varying from 10 to 20 years.

Moving forward, the group also intends to bid for more engineering, procurement, construction and commissioning projects within the SES segment.

He adds that the group’s mechanical and electrical engineering segment will eventually complement its SES segment.

“Eventually, the group aims to be a one-stop energy and engineering solutions provider. With this approach, it is better, as we maximise profits by bringing everything in-house,” he says.

On the prospects of the segment, Lai notes that with the recent emphasis on energy transition as outlined by the government in the National Energy Transition Roadmap, the group envisions numerous opportunities to capture the market by offering its services.

“Our transformational journey is in line with these goals and we are already prepared to deliver and meet the needs of the market,” Lai asserts.

Furthermore, he says the group intends to reach out to more industries and businesses with the solutions it offers.

These are all customisable solutions, tailor-made to fit exactly each client’s needs for long-term sustainability practices, he adds.

“To achieve carbon neutrality, we hope to be able to provide these customised services to businesses in a viable way and contribute to a greener and more sustainable future,” Lai utters.

Looking ahead, KAB aims to establish itself as a regional player, focusing on key markets including Thailand, Indonesia and the Philippines.

KAB strategically penetrated the markets with its recent acquisitions, namely its solar projects in Thailand and most recently PT Inpola Mitra Elektrindo, which owns a mini hydro plant in Indonesia.

“Our ‘know-how’ and expertise are transferable and as we familiarise ourselves with the business environment within these jurisdictions, we hope to roll out similar or other solutions which may be applicable.

“These could be in the form of biogas solutions in Indonesia or even hydro and solar solutions in the Philippines,” Lai says.

He adds that KAB sees a significant potential in Malaysia’s clean energy sector, especially in waste heat recovery (WHR).

WHR, an effective technology for repurposing wasted heat or gas, aligns with KAB’s commitment to environmental sustainability, cost savings for customers and supporting Malaysia’s goal of reducing greenhouse gas emissions.

Lai says KAB actively engages with the government’s renewable energy initiatives, having been selected as one of solar power producers under the Corporate Green Power Programme.

Emphasising the need for diversification, Lai points out that KAB aims to contribute to Malaysia’s green economy and attract foreign investments while actively participating in the country’s net-zero targets.

As for Thailand, KAB is committed to expanding clean energy solutions, leveraging its established presence.

Solar energy, with favourable conditions and supportive tariff structures, stands out as a promising avenue.

KAB already has solar assets in the country and is exploring additional sources like hydroelectric power, aligning with Thailand’s goals to reduce greenhouse gas emissions.

Currently, KAB holds 14 solar contracts in Malaysia and Thailand with a combined capacity of 17,318 kilowatt peak, comprising concession projects until 2046 and a total estimated concession value of RM146.8mil.

Meanwhile, given the abundant sunlight and rivers in Indonesia, KAB sees significant renewable energy opportunities.

The mini hydro project marks KAB’s initial venture into Indonesia, chosen for its water resources and hydroelectric power potential.

“The Indonesian government has also implemented favourable policies and incentives to promote renewable energy development, making it an attractive investment opportunity for us,” Lai says.

In the Philippines, KAB notes there are vast areas without grid access.

With substantial hydropower and solar potential, KAB is attentive to its government’s efforts to explore off-grid systems and microgrids for underserved regions.

While KAB is open to these opportunities, immediate exploration is not on the horizon, according to Lai.

Earlier this month, KAB partnered with Alliance Bank Malaysia Bhd (ABMB) in a green financing collaboration that aims to explore upcoming green projects, with KAB offering engineering solutions and ABMB providing financing.

Lai highlights that KAB’s business requires significant investment, emphasising the importance of a solid financing structure to manage high capital costs effectively.

“Currently, banks are very supportive when it comes to green projects. The recent partnership with ABMB will enable the group to unlock better rates on even better terms,” he says.

With all these elements in place, Lai is confident that KAB is well-prepared to embark on a successful journey towards sustainable growth and impactful ventures.