Malakov eyes new gas and solar power plant in Tanjung Bin for energy exports

KUALA LUMPUR (March 26): Independent power producer (IPP) Malakoff Corporation Bhd is constructing a combined cycle gas turbine (CCGT) and solar photovoltaic (PV) plant at its Tanjung Bin site in Johor to meet power exports. ) We are considering building a plant.

The group, which owns 21% of Peninsular Malaysia’s power generation capacity, said in its 2023 annual report on Tuesday that it was “actively pursuing” new CCGT projects.

Malakoff has seen a decline in generation capacity in recent years following the expiration of power purchase agreements (PPAs), most recently the 21-year PPA for the 640 megawatt (MW) GB3 gas-fired power plant in Lumut, Perak state, in 2022. finished.

Export opportunities abound, with Singapore aiming to import up to 1,200MW of electricity by the end of 2027. Malaysia has expressed its intention to participate, lifting a ban on renewable energy (RE) exports to Singapore last year, but details of the mechanism have not yet been finalized.

According to the annual report, Malakoff’s effective thermal power generation capacity was 5,342MW and renewable energy capacity was 153MW.

In Kukupu, Johor, where Jalan Tanjung Bin is located, Malakoff owns 90% of Johor’s 2,100MW coal-fired Tanjung Bin power plant, whose PPA expires in 2031. It also fully owns the 1,000MW coal-fired Tanjung Bin power plant. An energy power plant with a contract to operate until 2041.

Malakov said that besides looking for new CCGT capacity, the company will continue to invest in increasing the proportion of biomass co-firing projects with coal.

“Currently, the simultaneous firing rate is 0.5%, with good initial results. Going forward, this rate will be gradually increased to 2%, which will be implemented in stages to protect the integrity of equipment and machinery. I will continue to do so.”

We are also considering M&A

Apart from bidding for new renewable energy projects, Malakov said he is interested in acquisitions in greenfield operations, “particularly exploring large-scale solar power (LSS) projects, as well as opportunities in waste management and environmental solutions.” He said he was considering the possibility.

This happened as some potential sellers, including LSS players, admitted they were hesitant to part with their assets despite lucrative opportunities for monetization and current market stability. .

The group said it aims to leverage established partnerships and focus on familiar countries such as Malaysia, Saudi Arabia, Bahrain and Oman.

“By collaborating with domestic and international partners, these alliances not only strengthen our expertise and facilitate technology transfer, but also create investment opportunities in Malaysia,” the company said.

“We will take a prudent approach to M&A (merger and acquisition) activity, ensuring a balance between aggressiveness and selectivity. “We are well-positioned to weather the economic downturn and are able to acquire assets from sellers at favorable rates.”

Earlier this year, Malakoff managing director and CEO Anwar Sharin Abdul Ajib told The Edge in an exclusive interview that the group has set aside between RM500 million and RM1 billion for M&A. he said.

Malakoff last month announced a net loss of RM884.36 million for the financial year ending Dec 31, 2023 (FY2023). This is the group’s first annual net loss since its listing in 2015, although its net profit was RM255.03 million. By 2022. Sales decreased 12.4% to RM9.07 billion from RM10.36 billion in the same period last year.

The group also posted a net loss of RM357.1 million for the fourth quarter ended December 31, 2023 (4QFY23), compared to a net profit of RM41.9 million for 4Q22. , sales decreased by 23.89% from RM2.97 to RM2.26 billion. A year ago it was $1 billion.

The causes of the loss were a significantly negative fuel margin at the Tanjung Binh Power coal plant and Tanjung Binh Energy coal plant, a decline in the contribution of the GB3 gas plant due to the expiration of the PPA, and a loss at the 40% owned argon gas plant. It is said that this is due to a considerable portion of the Hidd Independent Water and Power Operator Associate in Bahrain.

As of 4pm on Tuesday, Malakoff shares rose 1 sen or 1.59% to 64 sen, giving the group a value of 3.17 billion ringgit.

Also read:
Malakoff posts a loss in FY2013 despite increased power generation, and is in the red again in the fourth quarter
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