Asiatic Group Holdings, through its wholly-owned subsidiary, Colben Energy (Singapore), has agreed to take a 30%-stake in a joint venture company to develop the group’s first biomass power plant in Malaysia.

The group expects to invest about RM10 million ($4.1 million) in the JV company, Maju Intan Biomass Energy (MJE), which has obtained approval from the Malaysian Government under the Small Renewable Energy Programme (SREP) to develop the 10 megawatt biomass power plant.

The SREP was set up to encourage private entities to generate power using renewable fuels and to sell part or all of their output to Tenaga Nasional Berhad (Tenaga), the government-owned manager and operator of Malaysia’s national power grid.

MJE is presently in talks with Tenaga and expects to sign a Build-Own-Operate (BOO) contract with a concession period of at least 21 years, similar to other BOO agreements signed by Tenaga.

Colben is responsible for the design, construction, operation and maintenance of the power plant project which will use oil palm fruit bunches as fuel to convert into electricity.

The project is eligible to generate tradable Certified Emission Reduction (CER) credits under the Clean Development Mechanism of Kyoto Protocol as the fuel aids in the reduction of greenhouse gas by disposing of fruit bunches which would otherwise decay in open air.

On this, MJE has engaged Mitsubishi UFJ Securities as the CER consultant for the project.

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