This article first appeared in The Edge Financial Daily on February 21, 2019

KUALA LUMPUR: Asia Poly Holdings Bhd, which is undertaking the development of a hydropower plant in Aceh, Indonesia, is downsizing the plant’s capacity from 12MW to 10MW to expedite the process of securing the independent power purchase agreement for the project from the state government.

Concurrently, Asia Poly has reduced its indirect equity ownership in the subsidiary undertaking the project, PT Rimba Tripa, to 49% from 51% previously, to comply with local legislation in relation to the reduced capacity, it said in a statement yesterday.

“The foreign shareholding will be restricted to a maximum of 49% for any proposed hydroelectric power plant with [a capacity of] 10MW [or] below,” said Asia Poly. Asia Poly’s 49% stake in PT Rimba Tripa is held via its wholly-owned unit Asia Poly Green Energy Sdn Bhd.

“In view thereof, PT Rimba Tripa has ceased to be [a] subsidiary of Asia Poly Green Energy Sdn Bhd; PT Rimba Tripa will now be a 49% indirect associate of Asia Poly,” the group said. Following the change in shareholdings, two Malaysians — Leow Teow Hong and Nik Maimun Nik Sulaiman — who previously owned 16% and 21% respectively in PT Rimba Tripa have ceased to hold stakes in the company. Meanwhile, Hiiard Sjafei, who previously owned 12% of PT Rimba Tripa, has increased his stake to 35%. The company also welcomed a new shareholder, Haryono, who now owns the remaining 16% stake.

Asia Poly, involved in the provision of cast acrylic products, bought into PT Rimba Tripa in May 2017 to participate in the development of the 12MW hydropower plant, with construction cost estimated at RM92 million at the time. The project was initially expected to commence construction in October 2017, with completion targeted in May 2019.