KUALA LUMPUR (July 2): Sawmill operator BTM Resources Bhd said its wholly-owned subsidiary BTM Biomass Products Sdn Bhd has obtained approval from the Sustainable Energy Development Authority (SEDA) to build and operate a renewable energy electrical power plant.

The electrical energy power plant (EEPP) will have the capacity to supply 10 mega-watt (MW) per hour of electricity to Tenaga Nasional Bhd, and is located in Chukai, Terengganu, it said in a bourse filing.

Meanwhile, BTM said it has received the relevant feed-in tariff (FIT) approval certificate today and the approval granted is for a period of 21 years with the commencement date set at no later than Jan 23, 2023.

“The expected date of signing the power purchase agreement (PPA) with Tenaga Nasional Bhd is October 2020 at a fixed tariff rate of RM0.3486 per kWh for 21 years,” it added.

In terms of the construction of the EEPP, BTM said it is targeted to commence in June 2021 and is expected to be completed in December 2022.

On the sources of funds for the construction, the company said it is mulling either bank loans, or proceeds from corporate exercises, or a combination of both, though it has not determined the breakdown of its funding yet.

BTM said the FIT approval or PPA will not have any significant impact on the performance of the company for FY20, but is expected to contribute positively to its future earnings starting from January 2023 for a period of 21 years.

Shares in BTM closed one sen or 7.14% higher at 15 sen, giving it a total market capitalisation of RM21.2 million.