KUALA LUMPUR (Feb 7): Kinergy Advancement Bhd (KL:KAB) has announced the acquisition of a 47.5% stake in an electricity generating plant operator for RM35 million, marking its potential entry into being an independent power producer (IPP).

The energy company's wholly owned unit, KAB Energy Holdings Sdn Bhd, on Friday signed an agreement to acquire the stake in Jati Cakerawala Sdn Bhd, according to KAB’s stock exchange filing. The agreement was signed with Pesaka Ventures Sdn Bhd, the holding company of Jati Cakerawala.

Jati Cakerawala holds an 80% stake in Teknologi Tenaga Perlis Consortium Sdn Bhd (TTPC), one of six IPPs established under Malaysia’s privatisation scheme to supply electricity to Tenaga Nasional Bhd (KL:TENAGA).

Through this stake acquisition, KAB indirectly became one of the project developers for the repowering of TTPC’s 650-megawatt power plant in Perlis. The facility, situated on a 37.5-hectare coastal site, was decommissioned in March 2024 after completing its 21-year power purchase agreement.

"Having been a critical asset in the nation’s energy supply for over two decades, the site has now reopened as a high-potential project," said KAB in a statement. "Its redevelopment and repowering present a unique opportunity to further strengthen the nation’s energy infrastructure and offer longer-term energy security for Malaysia’s future growth."

KAB executive deputy chairman cum group managing director Datuk Lai Keng Onn highlighted the strategic value of the acquisition, citing the site's strong energy infrastructure.

“Its proximity to TNB’s 275kV transmission line and the Peninsular Gas Utilisation (PGU) III pipeline ensures seamless access to both power distribution and natural gas supply. Additionally, the availability of a reliable water source at the site further confirms that this land is primed for the development of a new power plant,” he said.

“Recognising the critical power supply gap in West Malaysia, this acquisition and the subsequent repowering will be instrumental in addressing the nation’s energy shortage. It will make a decisive and lasting contribution to stabilising Malaysia’s energy supply, ensuring long-term energy security for the entire country,” Lai added.

The acquisition is expected to be completed by the second quarter of this year.

KAB, formerly Kejuruteraan Asastera Bhd, is engaged in electrical and mechanical engineering, as well as sustainable energy solutions.

Its shares closed half sen or 1.64% higher at 31 sen, giving it a market capitalisation of RM634 million.