KUALA LUMPUR (May 5): Suria Capital Holdings Bhd (KL:SURIA) said its consortium’s contract to build a 100-megawatt gas peaking plant in Kimanis has been confirmed by the Sabah state regulator.

A letter of notification, signifying the approval for the award of the project to the consortium, was accepted by the company on May 4, Suria Capital said in an exchange filing on Tuesday. The project however is still subject to conditions, including signing a power purchase agreement by year end.

The letter is valid for 12 months from the date of issuance and does not constitute a legally binding contract for the implementation of the project, Suria Capital noted.

Suria Capital, which operates eight ports in Sabah, is in a consortium with Sabah state-owned Innoprise Corp Sdn Bhd to develop the gas-fired plant that runs only during electricity demand surges. The project cost was never disclosed.

Innoprise Corp is an investment vehicle of Yayasan Sabah and a major shareholder in plantation outfit Innoprise Plantations Bhd (KL:INNO).

Conditions for the approval of the project includes securing funding within six months from the execution of power purchase agreement and submission of a commitment bond of RM5 million, Suria Capital said.

Further, the consortium would have to establish a special purpose vehicle for the project as well as be subjected to a moratorium on changes to the shareholding structure for ten years after the commercial operation date, the company added.