KUALA LUMPUR (Nov 3): Tenaga Nasional Bhd (KL:TENAGA) has teamed up with IOI Corporation Bhd (KL:IOICORP) and a consortium of 12 small and medium enterprises (SMEs) to develop a 500MW solar power project in Bahau, Negeri Sembilan.

In a filing with Bursa Malaysia on Tuesday, Tenaga said its subsidiary TNB Renewables Sdn Bhd (TRe) signed a joint venture agreement with the other parties to develop the project, which includes a 250MW/1,000MWh battery system, under the Corporate Renewable Energy Supply Scheme (CRESS).

The project will be developed through Bahau Energy Ventures Sdn Bhd, with TRe holding a 70% stake, IOI Corp's subsidiary Luminous Aspect Sdn Bhd holding 25% and the SME consortium called CSP 500MW Sdn Bhd holding the remaining 5%.

Tenaga will inject up to RM424.4 million into the project, while Luminous Aspect and CSP 500MW will provide up to RM151.5 million and RM30.3 million respectively. This brings the partners' combined maximum equity investment to RM606.2 million.

The project will be funded through a combination of contributions from the three partners and borrowings, with debt potentially making up 80% of the financing and equity the remaining 20%. The final funding arrangement has yet to be determined.

TRe will oversee the project's development and procurement, while IOI Corp and the SME consortium may take part in construction and installation works, subject to meeting the necessary requirements.

Tenaga said the partnership supports its plans to expand its renewable energy business and generate long-term returns from supplying green electricity.

The joint venture is not expected to have a significant impact on Tenaga's earnings, net assets or debt levels for the current financial year. Its future financial contribution will depend on the project's final cost, financing arrangements and when it begins operations.

Tenaga shares closed 14 sen or 1.05% lower at RM13.16 on Tuesday, valuing the group at RM76.7 billion.

Meanwhile, IOI Corp shares slipped one sen to RM4.45, giving the group a market capitalisation of RM28 billion.