KAB fortifies renewable energy presence with a 9.6MW mini-hydropower plant investment in Kedah

IN a landmark move to enhance its renewable energy (RE) footprint, Kinergy Advancement Bhd has proposed an acquisition of a 9.6MW (megawatt) mini-hydropower plant in Kedah, marking another strategic move forward in its RE portfolio in the ASEAN region.

The pioneer in Malaysia’s sustainable energy solutions made the acquisition through KAB Energy Holdings Sdn Bhd, the group’s wholly owned subsidiary. The deal entails the acquisition of a 100% stake in Tunjang Tenaga Sdn Bhd which owns an 80% stake in SDF Hydro Sdn Bhd.

A filing with Bursa Malaysia today (Feb 28) shows that the sale and purchase agreement (SPA) was entered into by KAB Energy and Vizione Energy Sdn Bhd (VESB), a wholly-owned subsidiary of Vizione Holdings Bhd.

SDF Hydro is entrusted with operating a mini-hydropower plant at Pedu Dam, Kedah, thus underlining KAB’s commitment to environmental sustainability in the ASEAN region. The other 20% stake in SDF Hydro is owned by Menteri Besar Kedah Incorporated (MBI Kedah), a Kedah state investment arm.

The Pedu Dam plant boasts a total approved installed capacity of 9.6MW with a net export capacity of 8.0MW approved by the Tenaga Nasional Bhd substation.

This project has a 21-year concession period starting from the Feed-in Tariff commencement date scheduled on April 30, 2027.

“Following our recent acquisition of the maiden 11MW mini-hydropower plant in North Sumatera (Indonesia) in August 2023, this investment represents a crucial move toward realising our vision of leading sustainable energy development in the region,” KAB’s executive deputy chairman-cum-group managing director Datuk Lai Keng Onn pointed out.

Datuk Lai Keng Onn

“By harnessing the untapped potential of Pedu Dam, we anticipate making substantial advancements in RE generation, hence furthering Malaysia’s environmental sustainability objectives.”

Lai further contended that hydropower plants stand out as a key contributor to RE production and generation due to their capacity to deliver stable energy outputs.

On this note, he stressed the minimal environment, social, and governance (ESG) concerns associated with the hydropower plant in question, highlighting that since the Pedu Dam’s completion in 1969, it has since served as a cornerstone for the agricultural growth of 96,558 hectares of land in Kedah and Perlis.

“The addition of this new mini-hydropower plant into our RE portfolio strengthens our position as a holistic one-stop energy & engineering solutions provider, hence further expanding our footprint in sustainable energy across ASEAN,” he justified.

“Completing these renewable projects in North Sumatera and Kedah, the group’s mini-hydropower total installed capacity will be elevated to 20.6MW. This reflects a beneficial increase in KAB’s long-term recurring income, facilitated by established power purchase agreements in Malaysia and Indonesia.”

At the close of today’s market trading, KAB was down 0.5 sen or 1.33% to 37 sen with 14.83 million shares traded, thus valuing the company at RM735 mil. – Feb 28, 2024

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