KUALA LUMPUR (July 11): BTM Resources Bhd (KL:BTM) has scrapped its 7MW renewable energy power plant project, citing difficulties in securing financing and rising project costs. This is the second power plant project it has cancelled since the 10MW biomass power plant it called off in May.
In a bourse filing on Friday, the loss-making sawmill operator said its wholly-owned subsidiary, BTM Land Sdn Bhd (BTML), received a letter dated July 7 from the Sustainable Energy Development Authority Malaysia (SEDA), confirming the acceptance of its request to relinquish the Feed-in Approval for the planned project.
The project, originally approved by SEDA in 2022, was intended to supply renewable electricity to Tenaga Nasional Bhd (KL:TENAGA) under the Feed-in Tariff (FiT) mechanism.
According to BTM, the relinquishment followed SEDA’s rejection of its application for more time to meet key milestones — specifically the execution of the financing agreement and the first payment to the appointed engineering, procurement and construction (EPC) contractor.
BTML also received a follow-up letter from SEDA on Feb 21, indicating its intention to revoke the Feed-in Approval due to non-compliance with the stipulated deadlines.
This led BTM to reassess the project’s viability amid rising feedstock and construction costs, as well as ongoing financing challenges, and ultimately decide to withdraw from the project.
The group said the relinquishment of the FiT approval would not have a material impact on its operations, as construction of the biomass power plant had not commenced.
Two months ago, BTM called off plans to develop the 10MW biomass power plant after the banking facilities secured for that project were cancelled. The project would have allowed the group to build, own and operate a renewable energy facility, and supply electricity to TNB at a fixed tariff rate of RM0.3486 per kilowatt-hour for 21 years.
At that time, BTM had put the 7MW power plant on hold, saying it was assessing whether to cancel it too.
Shares in BTM ended unchanged at four sen on Friday, valuing the company at RM50.3 million. The stock has been on a downward trend since mid-July 2023.