Mega First unit signs PPA for power plant project in Loas

-A +A

KUALA LUMPUR (Oct 1): Mega First Corp Bhd's 80%-owned indirect unit Don Sahong Power Company Ltd (DSPC) signed a power purchase agreement (PPA) with Laos' state-own utility Electricité Du Laos (EDL) for Don Sahong Hydropower Project on a take-or-pay basis.

In a filing to the Bursa Malaysia today, Mega First said that DSPC shall construct a 230kV transmission line from the project's switchyard to interconnect with the existing EDL Grid System.

"The PPA shall be for a period of 25 years from the commercial operation date of the hydropower project," it added.

On Sept 15, Mega First said that DSPC had sealed a concession agreement with the Laos government whereby the latter has granted, on a build, operate and transfer basis, the concession rights to DSPC for the development of a 260MW hydropower project commonly referred to as the Don Sahong Hydropower project located in the Hou Sahong Channel of the Mekong River, in Khong District, Laos.

The project, which is a 260MW run-of-river hydropower project capable of generating about 2,000 GWh of electricity per year, is expected to achieve commercial operation in early 2020.

The total project cost is about US$500 million, which is expected to be funded by internally generated funds and long-term debt.

The project was opposed by regional environmental group as the building of the mega dam would cause serious impact to the ecology of the Mekong River which flows through Myanmar, Laos, Cambodia, Vietnam and Thailand.

In Oct 2014, a coalition of environmental non-profit organisations from Cambodia, Thailand and the United States has filed a complaint with the Human Rights Commission of Malaysia, seeking an investigation into Mega First.

However, Mega First had rebutted the claim on the potential threat of the dam construction towards the environment. The group maintained that the design of the dam addressed the concern over possible impact towards the ecology and fisheries.

Shares in Mega First share price went up two sen or 0.8% to RM2.55 with a market capitalisation of RM563.8 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)