KUALA LUMPUR (March 23): Integrated Logistics Bhd has received approval to construct a large-scale solar photovoltaic plant in Bandar Bukit Kayu Hitam, Kedah, which has the capacity to produce 10 megawatts of electricity.

The company said the approval was conveyed by the Energy Commission via a letter of award to its wholly-owned unit, IL Solar Sdn Bhd.

“IL Solar has also entered into a power purchase agreement with Tenaga Nasional Bhd in respect of the sale and purchase of electricity to be generated from the large-scale photovoltaic solar plant for 21 years after the completion of the said plant,” Integrated Logistics said in a filing with Bursa Malaysia.

The levelised price, the company said, is fixed at 43 sen per kilo-Watt hour, with no increase throughout the 21-year solar power purchase agreement period.

The plant will start commercial operations by Jan 1, 2018, said Integrated Logistics, adding that the the project is not expected to have any material effect on its earnings for the current year ending Dec 31, 2017.

The distibution and warehouse services provider added, however, that the pro-forma effect of the project is expected to increase its total borrowings to RM129.73 million from RM83.23 million as at end-2015.

A glance at Integrated Logistics’ latest earnings announcement showed that it has total borrowings of RM86.08 million, equivalent to 26.97% as at end-2016.

The stock closed 1.5 sen or 1.82% higher at 84 sen today, giving the group a market capitalisation of RM149.54 million.