This article first appeared in The Edge Financial Daily on November 16, 2017

KUALA LUMPUR: Tenaga Nasional Bhd (TNB) is partnering Indonesian state-owned utility firm PT PLN to build a 2x200mw coal-fired power plant in Kalimantan, Indonesia.

TNB said the project is in line with its global expansion to secure new overseas generation capacity and its efforts to meet rising demand for electricity in Sabah.

In a statement yesterday, TNB said it has signed a memorandum of understanding (MoU) with PLN for the proposed project. The MoU includes, among others, the supply and export of electricity from the proposed power plant to Sabah. TNB holds an 83% stake in Sabah Electricity Sdn Bhd (SESB), which provides electricity generation, transmission, and distribution services in Sabah. The Sabah state government owns the remaining 17% stake in SESB.

The MoU’s duration is for two years, whereby the parties involved will start studying and exploring suitable business models, associated risks and financing options for the project. “The signing of the MoU is expected to be a win-win venture for both countries through the enhancement of bilateral cooperation and improvement in power supply stability for Sabah and Kalimantan,” said TNB.

The project was first mooted by Prime Minister Datuk Seri Najib Razak and his Indonesian counterpart President Joko Widodo during their bilateral meeting in Jakarta in March.