KUALA LUMPUR (Sept 6): Gamuda Bhd (KL:GAMUDA) said on Friday that its joint venture (JV) to build the Ulu Padas hydroelectric project has been approved by the Sabah energy regulator.

Once completed, the project is expected to achieve scheduled commercial operation by the end of 2030 and generate revenue exceeding RM400 million a year, Gamuda said in an exchange filing.

Gamuda has a 45% stake in the joint venture under UPP Holdings Sdn Bhd that was formed in October 2023, while Sabah Energy Corp Sdn Bhd owns 40% and Kerjaya Kagum Hitech JV Sdn Bhd holds the remaining 15%.

The project, which will be funded by a mix of internal funds and external borrowings, involves the construction of a dam located in the Tenom and Sipitang districts of Sabah and will deliver an average of 1,052 Gigawatt hours (GWh) of clean energy per annum. A hybrid floating solar plant will also be integrated into the reservoir area that will boost clean energy generation by 2031, according to Gamuda.

UPP Holdings’s wholly owned Upper Padas Power Sdn Bhd (UPPSB) will design, build, and operate the hydroelectric project via a 40-year power purchase agreement (PPA) to be entered into with the offtaker, Sabah Electricity Sdn Bhd, Gamuda said.

Major construction is expected to start in 2025, after UPPSB signs the 40-year PPA. Construction is estimated to be completed within six years.

The project is expected to increase Sabah’s electricity generation by 15% and double the state’s renewable energy mix, according to Gamuda.

At the time of writing on Friday, Gamuda’s share price was trading nine sen or 1.19% lower at RM7.49, valuing the company at RM20.90 billion.