This article first appeared in The Edge Financial Daily, on December 16, 2015.

KUALA LUMPUR: Malakoff Corp Bhd is the latest independent power producer (IPP) to have its power purchase agreement (PPA) extended by the government to address a potential power shortage following some delays by a few new power plants. In October, YTL Power International Bhd and 1Malaysia Development Bhd’s Powertek Bhd were given extensions to their PPAs.

In a filing with Bursa Malaysia yesterday, Malakoff said its indirect wholly-owned subsidiary Port Dickson Power Bhd (PD Power) had accepted the conditional award by the government, through the Energy Commission, for the extension of the operation of its existing power plant in Tanjung Gemuk, Port Dickson, Negeri Sembilan.

The extension period is for three years from March 1, 2016 to Feb 28, 2019, it added.

In comparison with Malakoff’s latest extension award, YTL Power’s PPA extension period is the shortest at two years and 10 months from March 2016 to December 2018, with a capacity of 585mw, while Powertek was given an extension of three years and 10 months from March 2016 to December 2019, with a capacity of 434mw.

The PD power extension is subject to conditions including the conclusion of discussions with Tenaga Nasional Bhd (TNB) and Petronas Gas Bhd or other gas suppliers on the new PPA and gas supply agreement respectively.

“The PD power extension is not expected to have any material impact on the group’s earnings and net assets for the financial year ending Dec 31, 2015, [but] is expected to contribute positively to its earnings and net assets going forward,” said Malakoff.

PD Power’s extension award was expected. Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili in October had said the government had approved the extension for YTL Power and Malakoff through a competitive bidding process.

YTL Power, Powertek and PD Power, all of which are first-generation IPPs, did not get their PPAs extended in the previous renegotiation exercise.

However, other first-generation IPPs that were awarded an extension of 10 years to their PPAs comprised Kuala Langat Power Plant Sdn Bhd (formerly Genting Sanyen Power Sdn Bhd) and Segari Energy Ventures Sdn Bhd, also a subsidiary of Malakoff. TNB Pasir Gudang was awarded a five-year extension to its PPA. TNB Pasir Gudang, which is currently operating under an agreement, will operate as an IPP after 2017.

A combined cycle gas turbine unit in SJ Jambatan Connaught, Klang, was also reportedly extended for four years and four months from September 2014 to December 2018.

In April last year, Malakoff had acquired PD Power from Sime Darby Bhd for RM300 million cash. PD Power has a total capacity of 440mw and is located on a 67-acre (27.1 ha) site in Tanjung Gemuk.

The gas-fired power plant has been supplying electricity to TNB under a 21-year PPA expiring in January 2016.

Malakoff shares closed one sen or 0.62% lower at RM1.60 yesterday, with a market capitalisation of RM8 billion.