KUALA LUMPUR (Feb 9): Energy firm Kinergy Advancement Bhd (KL:KINERGY) said on Monday it has entered into a long-term virtual power purchase agreement (VPPA) with Safran Landing Systems Malaysia Sdn Bhd, a unit of France-based Safran Group.
The agreement is to effectively neutralise the electricity consumption of Safran’s manufacturing plant in Negeri Sembilan, the group said in a statement. Unlike a conventional physical PPA, a VPPA is a financial contract linked to renewable energy generation.
“Through this mechanism, Kinergy delivers renewable electricity into the national grid, while the corporate consumer [Safran Landing Systems Malaysia] secures the associated environmental attributes together with a financial hedge tied to the renewable output,” the filing read.
Safran will purchase between 80 gigawatt-hours (GWh) and 108 GWh of renewable electricity annually for a period of 21 years from the commercial operation date, with an option to extend the term subject to regulatory approvals and mutual agreement.
The agreement was signed by Kinergy’s wholly-owned subsidiary, KAB Energy Holdings Sdn Bhd (Kabeh), and involves the virtual supply of renewable electricity generated from hydropower facilities into the national grid.
Kinergy executive deputy chairman and group managing director Datuk Lai Keng Onn said the agreement enables multi-national corporations to accelerate their decarbonisation efforts despite physical infrastructure constraints.
Safran Landing Systems Malaysia is engaged in the manufacturing, assembly, refurbishment, maintenance, repair and overhaul of aircraft wheels and braking systems, including carbon disc manufacturing. Its production facility is located at the Sendayan Techvalley in Negeri Sembilan.
Kinergy noted that Safran’s operations are already integrated with Malaysia’s only Organic Rankine Cycle (ORC) waste heat recovery facility, which Kinergy has operated since its commercial commissioning in 2020.
“This agreement, however, pushes [a] new frontier by introducing hydropower as a dispatchable and reliable renewable source within a VPPA framework, broadening the range of clean energy solutions available to corporate offtakers,” the group said.
Lai added that the VPPA reinforces Kinergy’s role beyond asset ownership, positioning the group as a provider capable of structuring complex renewable energy arrangements to support energy transition.
Shares in Kinergy closed half a sen or 1.33% higher at 38 sen as of noon break Monday, valuing the group at RM830.3 million.