KUALA LUMPUR (Apr 19): Energy sector service provider Scomi Group Bhd is partnering two companies to set up a joint venture company (JVco) in Singapore to pursue business opportunities in engineering, procurement and construction of hydropower plants, wind farms and port crane systems in Asia, including Turkey.

The partnership was undertaken via its wholly-owned unit Scomi International Private Ltd (SIPL) with Hong Kong-incorporated firm South Asia Logistic Services Ltd (SALS), and Malaysian private firm, Emir Equity Sdn Bhd, which is owned by Datuk Moehamad Izat Achmad Habechi Emir.

This marks Scomi’s second venture into the renewable energy sector after securing a solar project via another JV.

“This partnership further consolidates Scomi’s effort in building a renewable energy portfolio as a new core business. The technology that resides within the JVco will enable Scomi and its partners to bid for hydro and wind projects,” Scomi said in a statement today.

SALS and EESB are the shareholders of Imartek Sdn Bhd (Imartek) which owns a plant that manufactures core components of hydro turbines and generators in Lumut, Perak, said Scomi.

Under the JV agreement, Scomi will hold 50% equity in the JVco, while SALS and EESB will inject their equity in Imartek for their respective 45% and 5% stakes in the JVco. Consequently, Imartek will become a wholly-owned unit of the JVco, which will be known as Scomi Imartek Pte Ltd.

It said both hydro and wind power sectors are projected to enjoy high growth as more countries are reducing dependency on coal and hydrocarbon as energy resources.

Asia, it said, remains as the world’s largest untapped hydro potential, while the biggest markets in the wind sector are Australia and Turkey, which is where the JVCo will focus on.

The JVco will have an initial issued and paid-up share capital of US$10,000, with an authorised share capital of US$500,000. The source of funds for financing the investments in the JVCo will be a mixture of internal funds and external borrowings, said Scomi in a bourse filing.

Though the new partnership will have no impact on its earnings and net tangible assets for the financial year ending March 31, 2018 (FY18), Scomi said it should contribute positively to its future earnings.

The group's shares settled half sen or 2.8% lower at 17.5 sen today, for a market capitalisation of RM333 million.