PUTRAJAYA (Nov 4): IOI Corp Bhd (KL:IOICORP) is looking to lease out more of its plantation land for solar projects as it seeks to diversify its income streams beyond palm oil, said group managing director and CEO Datuk Lee Yeow Chor.
The integrated palm oil group is assessing other estates for potential solar development after being approached by several experienced renewable energy developers, Lee told reporters after IOI Corp’s annual general meeting on Wednesday (Nov 4).
“It depends on the connection with the grid and where the main connection point is. We have at least two other estates that are also close to major connection points to the TNB grid,” he said.
According to the group’s latest annual report, IOI Corp had 149,400 hectares of oil palm planted area in Malaysia as at June 30, 2026, of which 74% was in East Malaysia and the remaining 26% in Peninsular Malaysia.
IOI Corp first signalled its interest in renewable energy in 2024, when it began evaluating the use of its ageing plantation land for solar power development as part of efforts to monetise less productive assets.
On Tuesday, the group announced that it had partnered with Tenaga Nasional Bhd (KL:TENAGA) and a consortium of 12 small and medium enterprises (SMEs) to develop a 500MW solar power project in Bahau, Negeri Sembilan.
The project, which forms part of IOI Corp’s five-year strategic roadmap for 2025 to 2029, will be developed through Bahau Energy Ventures Sdn Bhd. Tenaga’s subsidiary TRe holds a 70% stake in the venture, while IOI Corp’s subsidiary Luminous Aspect Sdn Bhd owns 25% and the SME consortium, CSP 500MW Sdn Bhd, holds the remaining 5%.
Asked about the venture’s potential contribution to the group’s earnings, Lee said it was too early to provide an estimate, as the project was still at an early stage and is targeted for completion by end-2028.
He said the project would support the group’s climate strategy while allowing it to make better use of its land. The lease income is expected to provide a more consistent revenue stream compared with the fluctuations associated with commodity prices.
“The project fits into our climate strategy and allows us to make better use of our land. Through the lease, we expect to generate more consistent income over the 21- to 23-year period, rather than being exposed to fluctuations in commodity prices. It gives us an income stream that we would otherwise earn from plantation operations, but on a more consistent basis.
“Replanting an acre of plantation land costs about RM10,000 while a solar plant with battery storage requires an estimated investment of RM160,000 per acre. That is 16 times as much for the same area of land, so naturally, we would expect a reasonable return on that investment. This is why we see solar as a good diversification strategy for IOI,” Lee added.
Shares of IOI Corp were unchanged at RM4.45 at the time of writing on Wednesday, giving the group a market capitalisation of RM27.97 billion.