KUALA LUMPUR (July 25): Jentayu Sustainables Bhd (KL:JSB) said a 162-megawatt run-of-river hydroelectric project at Hulu Sungai Padas, Sipitang, Sabah remains on schedule despite the withdrawal of its partner from the project.
Jentayu said the project development collaboration agreement (PDCA) the company entered into with Sumitomo Corporation for the project in October 2024 was concurrently terminated together with the termination of a memorandum of understanding (MOU) between the two parties announced on Thursday. The MOU was signed two years ago to collaborate on a renewable energy project.
Jentayu's 70%-owned subsidiary Oriole Hydro Padas Sdn Bhd had later signed a 40-year power purchase agreement with Sabah Electricity Sdn Bhd for the RM2.8 billion hydroelectric project.
"Operationally, Project Oriole remains ongoing, and the board does not foresee any disruption arising from the termination of the MOU and PDCA, " said Jentayu in a filing on Friday.
“Insofar as to the progress of project Oriole, the project timeline remains on track and continues to be aligned with the terms set out in the power purchase agreement (PPA),” it added.
To finance the project, Maybank Investment Bank Bhd was appointed in September last year for equity fundraising. Bank Pembangunan Malaysia Bhd and MBSB Bank Bhd were also brought on board as lead arrangers for the senior debt portion of the financing.
Jentayu said the RM8 million advance payment will be refunded to Sumitomo upon the financial close of Oriole project, slated in the second quarter of this year.
Shares in Jentayu settled down half a sen or 1.12% at 44 sen on Friday, valuing the group at RM194.13 million.