1MDB inks mega solar power plant agreement

KUALA LUMPUR: 1MDB Solar Sdn Bhd, a unit of sovereign wealth fund 1Malaysia Development Bhd (1MDB), has inked a power purchase agreement (PPA) with Tenaga Nasional Bhd (TNB) for a 50mw solar photo-voltaic (PV) energy plant in Kedah.

“The PPA provides that 1MDB will design, construct, own, operate and maintain a solar photo-voltaic energy generating facility with a capacity of 50mw alternate current (mwac), proposed to be located in Kedah,” said TNB in a statement yesterday.

According to TNB, the PPA for the solar PV energy forms part of the initiative to support the national agenda for the development of renewable energy in Malaysia.

“The PPA governs the obligations of the parties to sell and purchase the Net Electrical Output generated by the facility for a period of not more than 25 years, in accordance with the agreed terms and conditions,” it said.

This confirms a Feb 24 report by The Edge Financial Daily that the Energy Commission and Sustainable Energy Development Authority were considering a proposal to build a 50mw solar plant in Kedah, with 1MDB tipped to spearhead the project.

The PPA comes hot on the heels of 1MDB clinching the award for Project 3B by TNB, which involves a 2,000mw coal-fired power plant worth an estimated RM11 billion.

1MDB’s solar PV plant is expected to add nearly 56% to the country’s existing operating solar capacity of 88.1mw, stemming from the renewable energy Feed-in-Tariff implemented in 2011. The largest FiT block in Malaysia currently generates 5mw of energy.

Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili was reported earlier as saying that 1MDB was the first independent power producer willing to build a 50mw solar power plant. No other bidders have come forward to propose a solar power plant beyond 20mw, which made 1MDB the main contender for the bid.

This article first appeared in The Edge Financial Daily, on April 15, 2014.


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