1MDB close to winning solar plant contract

KUALA LUMPUR: Government-owned 1Malaysia Development Bhd (1MDB) is in line to win the contract to build the country’s largest solar power plant in Kedah, said Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Johnity Ongkili, since it is the only bidder to propose a project of that size.

This confirms a Feb 24 report by The Edge Financial Daily that 1MDB was tipped to spearhead the proposed project to build a 50mw solar power plant, which is part of the government’s renewable energy (RE) agenda.

“There are not many bidders (for the proposed project), and this is the first time a company has proposed a project outside the Feed-in Tariff (FiT) programme,” Ongkili told The Edge Financial Daily at Parliament House yesterday, noting that the FiT programme only applies to projects involving up to 10mw solar power.

He also said 1MDB is the first independent power producer that was willing to undertake a 50mw solar power project.

“This [1MDB] is the first independent power producer that is willing (to build a 50mw solar power plant), which is why we decided to negotiate (with them),” he said, noting that so far no other bidders have come forward to propose a solar power plant beyond 20mw.

Ongkili had said previously that the government will not be calling for a tender for the proposed solar power plant, as it is only a pilot project.

Meanwhile, Sustainable Energy Development Authority Malaysia (Seda) will be releasing the 2014 quota for solar energy via the FiT programme today, said Ongkili. Seda was initally scheduled to announce the quota last week.

“I have just approved it and it will be announced after the post-Cabinet meeting tomorrow [today],” said Ongkili, adding that the delay was due to some fine-tuning to the proposal by Seda.

Ongkili also disclosed that while the amount for the FiT quota has not been lowered, there would be “some changes to the individual categories”.

He added that the approval process for the rates including the mechanism aspects of the FiT system remained the prerogative of the ministry.

The FiT programme allows electricity produced from RE resources to be sold to Tenaga Nasional Bhd (TNB) at a fixed premium price for a specific duration – dictated by the type of RE.

Commercial operators and private home owners can apply to participate in the FiT scheme which pays contributors for energy produced using RE systems such as solar photovoltaic and biomass technologies, and fed back into the national grid.

As at end-January this year, Seda received 3,498 feed-in applications and approved 2,760 of them, involving a total RE capacity of 536.07MW.

Earlier in the Dewan Rakyat yesterday, Ongkili also defended the award of the 2,000MW coal-fired power plant project, known as Track 3B, to 1MDB, stating that it was done via competitive bidding.

“Four companies took part in the competitive bidding, and YTL Power International Bhd and 1MDB were the only two that were shortlisted,” he said.

However, he explained that the contract was awarded to 1MDB as YTL Power had failed to fulfil a most critical requirement that the technology to be used must be tried and tested, noting that “we do not want a technology of that size that is yet to be proven”.

Ongkili was replying to a question by Rafizi Ramli (PKR-Pandan) that the estimated RM11 billion contract was given to 1MDB without any bidding.

This article first appeared in The Edge Financial Daily, on March 28, 2014.


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