Friday 23 Feb 2024
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KUALA LUMPUR (Jan 19): Sustainable energy specialist Kinergy Advancement Bhd (KAB) will team up with the Philippines' LCS Holdings Inc to jointly develop and operate a 20 megawatts-peak (MWp) solar photovoltaic (PV) plant in Santa, Ilocos Sur, the Philippines.

KAB said the proposed project aligns with its strategic objectives to broaden business opportunities within its diverse portfolio of sustainable energy solutions. This will further expedite the expansion of KAB’s footprint into other renewable energy (RE) projects in the Philippines and Southeast Asia, it added, but it did not disclose the value of the project.

In a filing with Bursa Malaysia on Friday, KAB said its wholly owned subsidiary KAB Energy Holdings Sdn Bhd (Kabeh) has entered into a non-binding heads of agreement (HOA) with LCS for the joint development. LCS holds a solar energy service contract (SESC) issued by the Department of Energy (DOE) of the Philippines.

LCS, the project owner, has secured all necessary contracts and permits for the solar farm project, but has yet to implement it.

"The parties will endeavour to secure off-take agreements through a retail electricity supplier or wholesale electricity spot market for 100% of the energy produced by the project," said KAB, adding that the project will have a lifespan of 25 years, providing a stable and long-term recurring income for KAB.

"LCS is also currently applying for the amendment of its SESC for an additional 80MWp. Upon the DOE’s approval of the amendment, the parties will explore the development of the additional project. The terms and conditions for the additional project shall be negotiated separately and documented in a subsequent agreement," it added.

LCS and Kabeh will fund the project’s development, construction, management and operation, either via cash or non-cash.

The HOA lays out the preliminary terms for a joint venture. The agreement, which is subject to definitive documentation and due diligence, is expected to be formalised soon. Both KAB and LCS hope to agree on the detailed terms for the definitive agreements by July 18.

In a separate statement, KAB said the Philippines will be its fourth RE market, in addition to Malaysia, Thailand and Indonesia.

“The signing of this HOA with LCS is a cornerstone in our strategy to broaden our renewable energy initiatives and expand beyond Malaysia into the Southeast Asian market. This collaboration is not just a business venture; it's a step towards a sustainable future.

"We are eager to combine our technical expertise in renewable energy with LCS's local insights to make this project a benchmark in the industry," said KAB executive deputy chairman cum group managing director Datuk Lai Keng Onn.

At noon market break, KAB shares were unchanged at 40 sen, with 7.21 million shares traded. Its market capitalisation stood at RM768.56 million. The stock has been trading flat over the past one year.

Edited ByKang Siew Li
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