KUALA LUMPUR (Dec 18): A joint venture (JV) between Gadang Holdings Bhd (KL:GADANG) and Hotrend Corporation Sdn Bhd has signed a 25-year power purchase agreement (PPA) with Sabah Electricity Sdn Bhd for a 15-megawatt alternating current (MWac) large-scale solar (LSS) photovoltaic (PV) plant in Tawau, Sabah.
In a bourse filing on Thursday, Gadang said the PPA was executed by Tenaga Aspirasi Sdn Bhd, a project company that is 60% owned by its wholly owned subsidiary Regional Utilities Sdn Bhd and 40% owned by Hotrend.
Under the agreement, Tenaga Aspirasi will design, construct, test, commission, own, operate and maintain the solar facility, which will be connected to Sabah Electricity’s medium-voltage distribution network at the Kubota main distribution substation.
The PPA governs the obligations of Tenaga Aspirasi and Sabah Electricity to sell and purchase the energy generated by the facility for a period of 25 years, starting from the commercial operation date, which is expected to fall on Nov 30, 2026, according to the filing.
In December last year, the Energy Commission of Sabah issued a letter of notification (LON), awarding the Tawau solar project to Gadang's JV, following a competitive bidding exercise for LSS developments in the state.
The LON required the JV to fulfil certain compliance obligations, including submitting and executing project documents to confirm acceptance.
Two other listed companies also won the LSS Sabah project, namely Nestcon Bhd (KL:NESTCON), which secured contracts to develop a total of 18.99MWac PV plants in Kimanis and Tawau, and Coastal Contracts Bhd (KL:COASTAL), whose wholly owned unit, Coastal Power Holdings Sdn Bhd, led a consortium that won the bid to develop a 15MWac PV plant on Sabah’s east coast.
Shares of Gadang closed unchanged at 25.5 sen on Thursday, with a market capitalisation of RM204.22 million.