KUALA LUMPUR: Tenaga Nasional Bhd
’s (TNB) wholly-owned subsidiary TNB Renewables Sdn Bhd (TRe), has entered into a joint venture agreement with IOI Corporation Bhd's subsidiary and a consortium of small and medium enterprises (SMEs) to develop a 500-megawatt (MW) solar project in Bahau, Negeri Sembilan.
In a filing with Bursa Malaysia, TNB said the project would comprise a 500MWac solar photovoltaic facility and a 250MW/1,000MWh battery energy storage system under the Corporate Renewable Energy Supply Scheme (CRESS).
The agreement involves TRe, IOI Corp's wholly-owned subsidiary Luminous Aspect Sdn Bhd and CSP 500MW Sdn Bhd, a consortium comprising 12 SMEs.
Under the agreement, TRe will hold a 70% stake in the joint venture, while Luminous Aspect and CSP 500MW will own 25% and 5%, respectively.
TNB said a special purpose vehicle, Bahau Energy Ventures Sdn Bhd, has been incorporated to undertake the development, construction, operation and maintenance of the project, as well as the supply of green electricity to corporate customers.
“TNB will inject up to RM424.4mil in the form of ordinary shares and redeemable preference shares (RPS) into TRe.
“Subsequently, TRe will then utilise for injection into renewable energy developer (RED) for the purpose of equity injection for the project based on shareholding of 70%. While the remaining equity portion will be subscribed by Luminous and Consortium of SMEs which is 25% and 5% respectively,” TNB said.
Luminous Aspect and CSP 500MW will contribute up to RM151.5mil and RM30.3mil, respectively, bringing the joint venture's maximum equity capitalisation to RM606.2mil.
The project is expected to be financed through a combination of shareholders' equity and third-party financing, with a proposed debt-to-equity ratio of up to 80:20, subject to market conditions and funding availability.
Under the agreement, TRe will act as the project's asset manager and oversee engineering and procurement arrangements.
The joint venture's board will comprise seven directors, with four appointed by TRe, two by Luminous Aspect and one by CSP 500MW.
“From a business perspective, the transaction is aligned with TNB Group’s renewable energy and energy transition strategy and enables TRe to participate in the development, ownership and operation of a large-scale renewable energy project under CRESS.
“From a financial perspective, the project is expected to create long-term value through participation in green electricity generation and supply to corporate customers and consumers,” TNB said.
From an operational perspective, TNB said the transaction enables TRe to act as lead member and asset manager of RED, thereby allowing TRe to leverage its technical, commercial and project development capabilities in renewable energy
The project is expected to contribute positively to TNB's renewable energy portfolio upon successful development and commencement of commercial operations.
