KUALA LUMPUR (Feb 6): Zecon Bhd (KL:ZECON) said on Thursday it has signed a non-binding pact with Sabah state-owned firm to explore joint development of a large-scale floating solar project in Lahad Datu.

Under the terms of the memorandum of understanding (MOU), Zecon will hold a 70% stake in a company to be formed, and Petrosabah Sdn Bhd will have 30%, the company said in an exchange filing. The project’s estimated costs, planned capacity, and other details were not disclosed.

“This MOU will serve as a platform for the parties to sign a formal joint venture agreement” as well as any other agreements related to the proposed project, Zecon said.

Petrosabah is a wholly owned subsidiary of Innoprise Corporation Sdn Bhd, the investment vehicle of Yayasan Sabah, which in turn is controlled by the Sabah state government.

Zecon is mainly involved in construction and engineering though it has interests in water infrastructure, property development, and hospital concession.

The MOU is valid for six months or until a formal joint venture agreement is signed. During the period, the parties will explore the long-term potential of their partnership and seek opportunities for mutually beneficial collaboration on the project, Zecon noted.

Zecon’s share price was unchanged at 48 sen at noon trading break ahead of the announcement. At the last price, the company has a market capitalisation of RM71 million.