KUALA LUMPUR (April 11): Tenaga Nasional Bhd (TNB) has signed a 21-year power purchase agreement (PPA) with Edra Energy Sdn Bhd, which will see the latter construct a gas-fired combined cycle electricity generating facility in Alor Gajah, Melaka.

Edra Energy is a subsidiary of Edra Power Holdings Sdn Bhd, which previously belonged to 1Malaysia Development Bhd, under Edra Global Energy Bhd. Edra Global was acquired by China Nuclear Power Corp for RM9.8 billion in November 2015 as 1MDB monetised its assets to repay debts.

In a stock exchange filing today, TNB said Edra Energy will also own, operate and maintain the facility, which will have three generating blocks, with a combined nominal capacity of 2,242.131 megawatts (MW), or 747.377MW each.

TNB said the PPA governs the obligation of both parties to sell and purchase the generating capacity and to the extent dispatch the electricity energy generated by the facility.

The PPA's effective date will kick off from the commercial operation date (COD) of the first generating block, which is expected to be on Jan 1, 2021. The second and third generating blocks' CODs are set to March 1 and May 1, 2021, respectively.

The PPA will have a neutral impact on the earnings of TNB over the term of the agreement, it added.

TNB closed up two sen or 0.15% at RM13.72, valuing it at RM77.4 billion.