Friday 23 Feb 2024
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This article first appeared in The Edge Malaysia Weekly on September 18, 2023 - September 24, 2023

CITAGLOBAL Bhd, formerly known as WZ Satu Bhd, is expected to sign a new memorandum of understanding (MoU) and undertake another acquisition, as management under the leadership of executive chairman and president Tan Sri Mohamad Norza Zakaria strives to expand the group further, following its earlier venture into solar panel engineering and construction, and telecommunications tower development, alongside its bread-and-butter infrastructure construction business.

A source close to the group tells The Edge that Citaglobal is going to sign an MoU with Shanghai-based SUS Environment Co Ltd, a developer and operator of waste-to-energy (WTE) plants, to explore the potential and feasibility of developing such power plants in Malaysia.

“SUS Environment is committing RM15 billion to WTE projects in Malaysia, together with Citaglobal,” says the source, who is working with Citaglobal on structuring the deal.

SUS Environment is partly owned by Shanghai Industrial Group Co Ltd (SIIC), an enterprise owned by the Shanghai municipal government. SUS Environment has a licensing agreement with Hitachi Zosen, the Japanese developer of WTE plants.

In 2020, a statement by SIIC regarding its acquisition of a 30.22% stake in SUS Environment mentioned that the latter had secured nearly 60 WTE projects in China, with a design capacity of more than 80,000 tonnes of domestic waste per day.

WTE is still new to Malaysia, with only the 20mw Ladang Tanah Merah plant in Negeri Sembilan developed by Cypark Resources Bhd operational. The government has cited WTE as among the new energy sources for the country.

In the 12th Malaysia Plan (12MP), the Malaysian government encourages WTE development, expressing its intention to develop six such plants by 2025. However, this plan seems to be moving rather slowly.

In March 2021, Cypark announced it would be developing another WTE plant in Batu Pahat, Johor, along with state investment corporation Permodalan Darul Ta’zim Sdn Bhd. However, details of the project have yet to be announced.

Meanwhile, YTL Power International Bhd and KDEB Waste Management Sdn Bhd, a Selangor state-owned company, are jointly developing a WTE plant with the capacity to handle 2,400 tonnes of municipal waste per day, with a gross generating capacity of 58mw.

The WTE plant — dubbed the Sultan Idris Shah Green Energy Plant — is slated to be built on a 245-acre site in Rawang, and will involve an investment of RM4.5 billion.

In May, Melaka chief minister Datuk Seri Ab Rauf Yusoh called for the Sungai Udang WTE project to be expedited so that it could be completed by next year, ahead of its initial schedule in 2026. He said implementation of the project is still at the negotiating stage between the Public Private Partnership Unit and Malakoff Corp Bhd. The project, estimated to be worth RM700 million, is expected to process 800 tonnes of municipal waste per day.

The thinking is that Malaysia needs more WTE plants to handle its domestic waste — and urgently. It is estimated that the country produces 30,000 tonnes of municipal solid waste (MSW) per day.

Alam Flora Sdn Bhd chief operating officer Azahari Zainal Abidin reportedly said that waste collected from Kuala Lumpur alone — with about 2,500 tonnes of MSW produced daily — could pile up to the height of the Petronas Twin Towers in only one week.

WTE has been cited as one of the alternative, green energy options for Malaysia under various government policies, including the National Energy Policy 2022-2040 and National Energy Transition Road­map (NETR).

In the National Energy Policy 2022-2040, the government identified WTE as a high potential nascent energy source. Under NETR, the government noted that Malaysia’s MSW represents a significant and expanding source of bioenergy. However, it also highlighted the unattractive economics of the WTE plants as one of the challenges that need to be addressed. Nevertheless, the potential is huge, given the astounding volume of MSW that is generated annually. According to the Ministry of Economy under NETR, Malaysia generates 13.9 million tonnes of MSW per year, with this figure expected to rise in coming years.

“Therefore, MSW represents a significant, and expanding, source of bioenergy. It has the potential to serve as feedstock for power generation (waste-to-energy) and for biofuel in transportation,” the ministry stated in NETR.

Still, without a concrete plan for the construction of WTEs across the country to reduce dependence on landfills, it could be a while before Citaglobal and SUS Environment could embark on a project.

Meanwhile, Citaglobal is also acquiring a minority stake in iFactors Sdn Bhd, a submarine cable contractor and lessor, the source adds. According to iFactors’ website, the company provides maintenance and implementation of optical submarine cable networks. It claims to have secured a long-term maintenance contract with Indonesia’s PT XL Axiata Tbk. It also claims to have completed laying two submarine cable systems in Java Island and the Caspian Sea, for a total distance of 250km. Its website states that it has one cable laying vessel, My Lady Norma 1.

The source says that the acquisition of the stake in iFactors also comes with a profit guarantee for the group.

When contacted, Citaglobal declined to comment.

It should be noted that Citaglobal had entered into a number of MoUs previously. In January, the group entered into an MoU with Indonesia Battery Corp (IBC) for the proposed development of a battery cell manufacturing plant and battery energy storage system (BESS).

In October 2022, Citaglobal had also inked a collaboration agreement with Genetec Technology Bhd for the development of BESS to store and manage excess power during the generation of renewable energy.

In April 2023, Citaglobal Genetec BESS Sdn Bhd, the joint-venture company, introduced Malaysia’s first locally developed 1mw BESS, known as MYBESS.

In December 2022, a consortium between Citaglobal and Reneuco Bhd was awarded a letter of intent (LOI) from Malaysia Rail Link Sdn Bhd (MRL) to become the independent power producer (IPP) for the East Coast Rail Link (ECRL) project.

Then, in June 2023, Citaglobal signed an MoU with Petronas Global Technical Solutions Sdn Bhd (PGTS) for strategic collaboration on a wide range of renewable energy technologies and applications.

The following month, the group inked an MoU with Abu Dhabi Future Energy Company PJSC, also known as Masdar, to look into jointly developing renewable energy projects in Malaysia. The MoU will enable Citaglobal to strengthen the development of a 2GW solar farm in Pahang, the group states in a filing with Bursa Malaysia.

In terms of contracts and projects arising from the MoUs with IBC, PGTS and Masdar, progress remains to be seen. However, there is potential for these MoUs to become fruitful, especially in Pahang. This is because Citaglobal and its partner Reneuco have been awarded an LOI from MRL — developer of the ECRL — for the consortium to become the IPP for the rail line.

The collaboration with Masdar on the 2GW solar farm is expected to be part of the ECRL IPP scheme, in which MYBESS will be used to support the power generation. Further development of BESS with IBC could also be on the cards, leveraging each other’s strengths. 

 

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