KUALA LUMPUR (June 6): Nextgreen Global Bhd (KL:NGGB) has signed a memorandum of understanding (MOU) with Sawit Palm Oil Industrial Cluster Sdn Bhd (SPOIC) to collaborate on establishing the 400-acre Green Technology Park Sandakan in Sabah.

SPOIC is a subsidiary of the Sawit Kinabalu Group, the investment arm of the Sabah state government, while Nextgreen is primarily involved in  the production of green technology, sustainability, and renewable energy.

In a bourse filing on Thursday, Nextgreen said that the MOU aims to facilitate detailed discussions on the definitive agreements, including the joint venture agreement and other related agreements for the proposed project.

“Both parties will take all necessary actions to finalise and execute the definitive agreements within one year from the date of the MOU, or any mutually agreed extended period,” Nextgreen said, noting that the MOU would automatically expire if the definitive agreements are not executed within the specified timeframe.

Under the MOU, Nextgreen and SPOIC are exploring the possibility of establishing a joint venture company (JV) for the proposed project. Upon its establishment, SPOIC will hold a 70% share, with the remaining held by Nextgreen.

Furthermore, there are four additional projects to be explored within the proposed project site, including the collection and processing centre (CPC), pulp mill, raw water treatment plant, and steam boiler.

While SPOIC is not obliged to invest in these additional projects, they will have the first right of refusal to be a JV partner, Nextgreen said.

Nextgreen added that the proposed project will be implemented on approximately 400 acres of land owned by SPOIC in Sandakan, with the exact size and location of the project site to be determined through a joint survey and evaluation.

Shares in Nextgreen settled one sen or 1.16% higher at 88 sen on Thursday, with the group’s market capitalisation reaching RM883.22 million.