PETALING JAYA: Gamuda Bhd
’s latest venture to co-develop a portfolio of large-scale renewable energy (RE) projects in central Tasmania with local Tasmanian landowners is largely viewed as a strategic pivot for the group.
CIMB Research said it is positive on Gamuda’s venture as the move capitalises on Australia’s clean energy transition drive over the past 18 months, achieved via a two-pronged strategy comprising investments in “shovel-ready” solar and wind farm projects and selectively bidding for high-value engineering, procurement, and construction (EPC) works for solar, wind, pumped-hydro and transmission projects.
“Gamuda is currently working on two major early contractor involvement (ECI) engagements involving RE initiatives: Alinta Energy’s Oven Mountain Pumped Hydro Energy project in New South Wales and Copenhagen Infrastructure Partners’ Capricornia Energy Hub in Queensland.
“Aside from supporting a steady pipeline of construction jobs in Australia, the planned investments mark a first step towards building Gamuda’s green concession portfolio via future sales of electricity generated from the RE assets,” the research house said in a report yesterday.
CIMB Research highlighted that the move effectively transforms Gamuda from just performing EPC roles into a full-fledged RE developer, aligning with the extended Gamuda Green Plan (through 2030), with potential RE capacity build-up beyond the initial target of 500MW.
“Compared with EPC margins for competitive bids (5% to 6%), we estimate the addressable EPC margins for RE projects to be higher at 8% to 10% under an ECI structure, and as high as 12% to 15% with equity participation,” it added.
MIDF Research is also positive on Gamuda’s latest development in the RE space, citing secured job replenishment and recurring income once the assets reach commercial operation.
“Gamuda remains our favourite for the construction sector, sitting on an all-time high order book of RM37.2bil and a geographically diversified portfolio for both construction and property,” it said.
Meanwhile, BIMB Research said Gamuda’s latest RE project’s internal rate of return is estimated in the low teens, with upside from economies of scale and technology improvements.
“This initiative is aligned with Gamuda’s strategic goal to build recurring earnings and tap into Australia’s decarbonisation trend. By owning assets, Gamuda not only locks in sustainable income streams but also gains full control of project timing, execution, and potential upside from long-term power purchase agreements,” it said.
