Kinergy to develop first greenfield 4.26MW biogas project in Indonesia

KINERGY Advancement Bhd (KAB) (formerly Kejuruteraan Asastera Bhd) which is touted as the Asia-Pacific region’s Top 10 energy sustainability solutions provider has unveiled a term sheet to acquire the entire equity interest in PT Green Energy Specialist One (PT GESO) and build a 4.26MW biogas plant in Aceh, Indonesia.

This proposed acquisition via the group’s wholly owned subsidiary KAB Energy Holdings Sdn Bhd includes purchaser exclusivity over the 6.5-hectare land where the biogas plant will be constructed.

The entire exercise exemplifies KAB’s enhanced capabilities in not just planning and constructing but also developing, maintaining and owning diverse energy projects, thus cementing its leadership in the sustainable energy sector.

PT GESO has already secured a power purchase agreement (PPA) with PT Perusahaan Listrik Negara (PLN) which is Indonesia’s state electricity company. The PPA which has a duration of 25 years from the commercial operation date ensures a steady and reliable revenue stream, hence bolstering KAB’s recurring income on the regional stage.

Additionally, this proposed acquisition entails an exclusive agreement with four palm oil millers’ sale and purchase of palm oil mill effluent, thus securing a consistent supply of raw materials essential for the biogas production to KAB Energy before the formal acquisition.

This could be marked as one of the strategic arrangements aimed at enhancing the operational efficiency and reliability of the plant. KAB Energy has agreed to complete this strategic deal for a reasonable consideration of approximately RM8.89 mil.

A premier greenfield biogas facility with an installed capacity of 4.26MW, the plant will enhance KAB’s sustainable energy segment’s (SES) diverse energy portfolio while reinforcing its commitment to sustainable energy generation and environmental stewardship.

“The acquisition of the Aceh biogas plant is a strategic move that aligns perfectly with our growth plan in the realm of sustainable energy,” commented KAB’s group managing director Datuk Lai Keng Onn.

“Being the world’s largest producer of palm oil, Indonesia presents a compelling choice for this development with abundant feedstock available for biogas production.”

Beyond that, this project also strengthens KAB’s renewable energy portfolio by positioning the group as a competent energy solutions provider to leverage regional growth opportunities.

“Upon completion, the Aceh biogas plant will be another recurring revenue generator for KAB, reinforcing our foothold in the Southeast Asian market and supporting our mission of driving sustainable energy development,” envisages Lai who is also KAB’s executive deputy chairman.

The latest move to acquire PT GESO reflects the group’s intent to solidifying its market presence as a distinctive energy player while ensuring its advancement in the rapidly growing Southeast Asian energy market.

At 2.50pm, KAB was down 0.5% or 1.35% to 36.5 sen with 9.67 million shares traded, thus valuing the company at RM725 mil. – June 6, 2024

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