ACE Market-listed petroleum trading and oil bunkering player Fast Energy Holdings Bhd (formerly Techfast Holdings Bhd) is making its presence felt in the renewable energy (RE) scene vis-à-vis a solar power project.
Yesterday (Oct 7), the company announced that its newly-established wholly-owned subsidiary Fast Solar Sdn Bhd has inked a solar power purchase agreement with Volta Energy Sdn Bhd, Apex Office Furniture Exporter Sdn Bhd and Apex Office Furniture Exporter Sdn Bhd (collectively known as Apex Group).
The agreement will pave the way for Fast Solar to construct a solar photovoltaic (PV) system and supply electricity to Apex Group for an initial period of 25 years.
In this regard, Volta Energy will act as the engineering, procurement, construction and commissioning (EPCC) contractor to undertake the design, construction, installation and operation of the solar PV system which will be installed on the rooftop of Apex Group’s factory.
On its part, Fast Solar will fund the construction and purchase the solar PV system from Volta Energy. Following that, company will collect all amount payable by Apex Group for the purchase of electricity for an initial period of 25 years while Volta Energy will be responsible for operations and maintenance of the solar PV system.
“This venture demonstrates our commitment to strengthen the Fast Energy’s presence in the RE sector as we seek to become a diversified energy player,” commented Fast Energy’s executive director Tan Wye Chuan.
“As a petroleum trading and oil bunkering player, this will contribute towards neutralising the group’s carbon emissions in pursuit of becoming a green energy company.”
The solar PV system is expected to generate approximately 39.2 million kWh of clean electricity during the 25-year contract period. Slated for completion this year, the solar rooftop project is expected to contribute positively to Fast Energy’s cash flow and future financial performance.
Based on the fixed tariff rate of 30 sen per kWh, the estimated contract value for the purchase of electricity by Apex Group amounts to RM11.7 mil over the 25-year period.
“As an investor, Fast Solar will fund the construction cost of the solar PV system for RM2.86 mil and thereon sell electricity to Apex Group,” Tan pointed out.
“We see exciting prospects ahead as we look for opportunities to enlarge our portfolio of solar PV investments. Via this model, many businesses do not need to incur heavy upfront costs to enjoy the benefits of using solar energy.”
The potential proceeds of up to RM109.1 mil from the group’s proposed two-for-one rights issue with free warrants will provide Fast Energy the financial flexibility to capture future growth in this industry.
At the close of yesterday’s trading, Fast Energy was up 2 sen or 9.3% to 23.5 sen with 10.94 million shares traded, thus valuing the company at RM95 mil. – Oct 8, 2021
