Tenaga Nasional Bhd (TNB), IOI Corporation Bhd and a consortium of 12 small and medium enterprises (SMEs) are jointly developing a 500MW solar photovoltaic project with a 250MW/1,000MWh battery energy storage system in Bahau, Negeri Sembilan.
In a bourse filing on Tuesday, TNB said its wholly owned subsidiary, TNB Renewables Sdn Bhd (TRe), had entered into a joint venture shareholders agreement with Luminous Aspect Sdn Bhd, a wholly owned subsidiary of IOI Corp, and CSP 500MW Sdn Bhd, representing the SME consortium, for the project.
Under the agreement, TRe will hold a 70 percent stake in the joint venture, while Luminous and the SME consortium will own 25 percent and 5 percent, respectively.
A special purpose vehicle, Bahau Energy Ventures Sdn Bhd, has been incorporated as the renewable energy developer (RED) for the project, which will be developed under Malaysia’s Corporate Renewable Energy Supply Scheme (CRESS).
The project covers the design, development, construction, installation, testing, commissioning, operation and maintenance of the solar and battery storage facilities. It will also involve the generation and supply of green electricity to corporate customers and other consumers.
TNB said the project would be funded through a combination of shareholders’ equity and third-party project financing, with a debt-to-equity ratio of up to 80:20, or another ratio depending on prevailing market conditions and funding availability.
TNB will inject up to MYR 424.4 million ($104.1 million) into TRe through ordinary shares and redeemable preference shares. TRe will subsequently use the funds to subscribe for its 70 percent equity interest in the RED, with Luminous and the SME consortium subscribing for the remaining stakes.
TRe will act as the lead shareholder and asset manager of the project, overseeing its engineering and procurement arrangements.
IOI Corp and the SME consortium will also have opportunities to participate in the project’s civil, mechanical, electrical, installation and commissioning works. Such participation will be subject to competitive pricing, relevant experience, technical capabilities and compliance with TNB’s procurement, safety and quality requirements.
The RED’s board will comprise seven directors, with TRe appointing four, Luminous two and the SME consortium one. The chairman will be appointed from among the directors nominated by TRe.
TNB said the investment was in line with the group’s renewable energy and energy transition strategy, allowing it to participate in the development, ownership and operation of a large-scale renewable energy project under CRESS.
The scheme facilitates the supply of renewable electricity from developers directly to corporate consumers through the open-access electricity supply network in Peninsular Malaysia.
The project’s prospects are supported by growing corporate demand for renewable energy and Malaysia’s energy transition agenda, TNB said.
Upon completion and commencement of commercial operations, the project is expected to expand the group’s renewable energy portfolio and strengthen its role in supporting Malaysia’s transition to cleaner energy.