KUALA LUMPUR (Sept 17): Reservoir Link Energy Bhd (KL:RL) said it has signed a 30-year power purchase agreement (PPA) with Syarikat SESCO Bhd, a wholly-owned subsidiary of state-owned Sarawak Energy Bhd, for a 200MWac solar photovoltaic project in the state with an estimated development cost of RM570 million.

The project in Tinjar, which will span about 600 acres, will be its largest single renewable energy project, said Reservoir Link in a bourse filing on Thursday. Construction is targeted to begin in January 2028, with commercial operations scheduled for Dec 31, 2029.

Once operational, the plant is expected to export about 401GWh of electricity to the Sarawak grid annually, enough to power an estimated 100,000 households.

Reservoir Link said its indirect wholly-owned subsidiary RL Kenyalang Solar Sdn Bhd entered into the agreement with SESCO to construct, own, operate and maintain the solar facility.

Under the PPA, RL Kenyalang will generate and deliver solar energy from the facility to SESCO, which will purchase the net electrical output generated by the project.

The facility is targeted to achieve commercial operation by Dec 31, 2029, subject to the completion of the construction, testing and commissioning, as well as the receipt of relevant approvals.

The PPA will remain in force for 30 years from the commercial operation date, unless extended or terminated earlier under the terms of the agreement.

SESCO will make monthly payments to RL Kenyalang for electricity delivered from the facility at the energy rate prescribed under the PPA.

Reservoir Link said the agreement is not expected to have a material impact on its earnings or net assets per share for the financial year ending June 30, 2027 (FY2027).

However, the project is expected to contribute positively to the group’s earnings once commercial operations begin. The impact on gearing will depend on the final financing arrangements, which have yet to be determined.

Reservoir Link slipped into the red in FY2026, posting a net loss of RM68.12 million versus a net profit of RM29.47 million a year earlier, while revenue fell 37.7% to RM78.14 million from RM125.40 million.

Shares of Reservoir Link closed unchanged at 31.5 sen, valuing the group at RM122.9 million.