KUALA LUMPUR: Tenaga Nasional Bhd (TNB), through its wholly owned subsidiary TNB Renewables Sdn Bhd (TRe), has entered into a joint venture shareholders’ agreement with an IOI Corp Bhd subsidiary and a consortium of small and medium enterprises (SMEs) to develop a 500-megawatt (MW) solar power project in Bahau, Negeri Sembilan.
The project, undertaken through Bahau Energy Ventures Sdn Bhd, will comprise a 500MWac solar photovoltaic facility and a 250MW/1,000-megawatt-hour battery energy storage system under the Corporate Renewable Energy Supply Scheme (CRESS).
Under the agreement signed on Nov 3, TRe will hold a 70% stake in the project company, while IOI’s wholly owned Luminous Aspect Sdn Bhd will own 25% and CSP 500MW Sdn Bhd, representing 12 SMEs, the remaining 5%.
TNB is expected to inject up to RM424.4 million into TRe through ordinary shares and redeemable preference shares, which will subsequently be channelled into the project company.
The joint venture’s maximum equity capitalisation is RM606.2 million, with Luminous Aspect and the SME consortium expected to contribute RM151.5 million and RM30.3 million respectively.
The project will be financed through a combination of shareholders’ equity and third-party financing, with a debt-to-equity ratio of up to 80:20, subject to funding conditions.
TRe will act as the project’s asset manager and oversee engineering and procurement arrangements. The SME consortium and IOI will also have opportunities to participate in civil, mechanical, electrical, installation and commissioning works, subject to procurement requirements.
TNB said the project is aligned with its renewable energy and energy transition strategy, with growing corporate demand for green electricity and the CRESS framework supporting its prospects.
The transaction is not expected to have a material impact on TNB’s earnings per share, net assets per share or gearing for the current financial year, apart from funding obligations arising progressively from the project.