KUALA LUMPUR (Dec 11): Jentayu Sustainables Bhd said one of the two run-of-river hydropower plants it is planning to acquire in Tenom, Sabah, known as the Telekosang Hydro 2, has achieved its initial operation date on Dec 9, with the feed-in-tariff commencement date (FiTCD) targeted in the next 30 days.
Once the FiTCD of Telekosang Hydro 2, which has a generation capacity of 16MW, is achieved, it means the plant is successfully supplying power as contracted.
This follows the FiTCD of the 24MW Telekosang Hydro 1 in February, which has successfully produced more power than projected over the past 10 months, Jentayu said in a statement.
The Telekosang plants are operated by the private vehicle of Jentayu’s major shareholders, led by Datin Nurhaida Abu Sahid, together with Jentayu executive chairman Datuk Beroz Nikmal Mirdin.
The shareholders are injecting the Telekosang plants, together with a 5.99MW solar power plant in Kedah, into Jentayu, under a cash and share deal.
Approximately 9% of the consideration of this transaction was settled via a cash deposit that has already been paid, while the outstanding balance of 91% will be settled fully via the issuance of new shares, upon receiving approval from regulators and shareholders.
Jentayu is now working on its next run-of-river hydropower plant — the 170MW Project Oriole in Sipitang — which is currently at its fourth phase of development, namely the negotiation and finalisation of the power purchase agreement (PPA) and securing financing for the full construction of the project.
It is also conducting due diligence to bring an additional partner on board the project, with the process expected to be completed by 1Q2024.
“In meeting the expressed timeline of Project Oriole, Jentayu has spent RM73.67 million thus far in completing Phases 1-3 for Project Oriole. This consists of 2.6% of the total project budget, which is similar to the benchmarks achieved at similar stages for Telekosang Hydro 1 and 2,” it said.
The first three phases include consultation with the federal and Sabah state governments, securing land and water use rights, building the necessary infrastructure to access the sites, as well as conducting necessary surveying, feasibility and verification studies.
It said that the project has secured a letter of intent from the energy ministry back in October 2022, which allowed Jentayu to continue its development.
“Project Oriole was subsequently included as a confirmed project in the Plant Up Plan for Sabah that was released on Sept 19, 2023, which represents the development plan for future power-generating plants in Sabah.
“Given the scale of the project and the RM2.8 billion required for development, Jentayu embarked on an investor selection process in February, targeting strategic partners and infrastructure investors both locally and abroad,” it said.
The group recently announced a private placement to raise between RM46.22 million and RM62.96 million, of which RM26 million is to ensure the completion of Phase Four, with the balance for other renewable energy projects, expansion of its healthcare business led by its Ohana Specialist Hospital in Setapak, working capital and other expenses. The group has 152.15 million warrants B outstanding, exercisable at 66 sen per share, compared with its share price of RM1.23 per share.
“This amount (RM26 million) is for technical, financial, and legal fees, to ensure the tender process and all related compliance requirements are followed, and to ensure that the interests of Jentayu are protected. These fees are only paid in the event the PPA is approved,” it said.
“Jentayu is working very closely with the state government of Sabah and other authorities to ensure that clean and reliable energy is produced in a timely manner to meet Sabah’s urgent power needs, as highlighted recently by the prime minister,” it added.
Shares of Jentayu traded 5.83% or seven sen higher to RM1.27 at the time of writing on Monday, giving it a market capitalisation of RM533.68 million.