MALAKOFF Corporation Berhad (MALAKOF) expanded its renewable energy portfolio in March 2023 by acquiring a 70% equity interest in the RP Hydro Sdn Bhd Small Hydropower (RPHK SHP) project.
Located along Sungai Galas in Kelantan, the project adopts a run-of-river design incorporating a cascade system to harness the river’s natural flow.
With a total installed capacity of 84MW, it is Malaysia’s first low-head small hydropower development and comprises three generating sites: Serasa, the furthest upstream, followed by Kemubu and Kuala Geris.
Upon commissioning, the facility is expected to produce approximately 484GWh of renewable electricity each year under a 21-year Renewable Energy Power Purchase Agreement (REPPA).
To develop the project, MALAKOF has awarded a fixed-price engineering, procurement, construction and commissioning (EPCC) contract, with the overall capital expenditure estimated at RM1.2 bil.
Operations and maintenance of the plant will be undertaken by Rising O&M Engineering Services Sdn Bhd (ROMES) in which MALAKOF has a 70% stake.
Around 80% of the total RM1.2 bil capex for the SHP project is funded via ASEAN Green SRI Sukuk programme of up to RM975 mil.
According to SEDA’s official FIT schedule, tariffs for low-head SHPs are set at 29sen/kWh.
Thus, TA Securities believe RPHK SHP’s tariff should range close to these levels.
“We estimate the 84MW SHP scheme could potentially contribute average annual earnings of RM22-25 mil to MALAKOF over its 21-year REPPA, assuming capex is fully depreciated over the REPPA tenure,” said TA securities.
Importantly, the civil structure for a SHP plant is designed for long life (up to an indicative 100 years subject to periodic audits) while the turbines can last up to 50 years, suggesting high likelihood of the SHP plant’s REPPA being extended.
“Maintain Buy at SOP-derived TP of RM1.26. We continue to like MALAKOF for strong capacity replenishment prospects,” said TA.—Aug 5, 2026
Main image: Malakoff
