KUALA LUMPUR (July 26): Electrical and mechanical engineering services provider Kejuruteraan Asastera Bhd (KAB)’s wholly-owned subsidiary KAB Smart Solar Energy Sdn Bhd (KSSE) has received a letter of award (LoA) from Mydin Wholesale Emporium Sdn Bhd and inked a principal term sheet agreement with FT Hose & Hose Sdn Bhd to install a total of 4,971-kilowatt peak (kWp) solar systems.

In a statement today, KAB said the LoA from Mydin Wholesale Emporium concerns the installation of a grid connection photovoltaic solar system with an estimated capacity of 4,000 kWp for Mydin Mall Tunjong in Kelantan. 

“The solar system will be installed in phases and is scheduled to achieve commercial operation date (COD) by the third quarter of 2022 (3Q22).

“This project, designed to generate approximately 142 million-kilowatt hours (kWh) of renewable electricity is expected to reduce energy cost by approximately RM50 million and neutralise 33,105 tonnes of carbon dioxide emissions over 25 years,” the electrical and mechanical engineering services provider added.

Meanwhile, the principal term sheet agreement with FT Hose involves the installation of two solar systems in Ipoh, Perak with 521kWp and 450kWp respectively, giving a total of 971kWp installed capacity.

“This agreement has been in effect and COD is scheduled by 3Q22. The solar systems at these two locations are expected to generate around 32 million kWh of renewable electricity, reduce energy cost by approximately RM15 million and neutralise 7,460 tonnes of carbon dioxide over 25 years,” it added.

KAB noted that under the LoA and principal term sheet agreement, KSSE or any of its nominated subsidiaries is the legal owner of the solar systems. 

“Through the power purchase agreements (PPAs) to be executed between the parties, Mydin Wholesale Emporium and FT Hose are obligated to pay KSSE for the electricity generated in accordance with the agreed solar energy rate stated in the LoA and the principal term sheet agreement for a period of 21 years,” it added.

KAB managing director Datuk Lai Keng Onn said that in line with the group’s expansion into green solutions, he is confident that these initiatives will pave the way for all parties to operate sustainably for the future generation.

“These solar systems will help reduce the carbon footprint while generating green energy at lower cost. We look forward to creating a positive impact with Mydin Wholesale Emporium and FT Hose by promoting initiatives towards sustainable development.

“We are determined to rapidly grow our business in the area of green energy solutions and support Malaysia’s commitment to achieving 20% renewable energy usage in its energy mix by 2025.

“From a business perspective, these PPAs are also beneficial to us as [they] will continue to provide us with a stable long-term recurring income,” he added.

KAB also noted that to date, the group has a combined installed capacity of 10,463 kWp photovoltaic solar systems, which include recently signed PPAs.

“These PPAs augur well for KAB and will continue to generate sustainable recurring income for the next 25 years, in line with the group’s strategic business direction,” it said.

At noon break today, KAB’s share price was down three sen or 3.33% at 87 sen, giving the group a market capitalisation of about RM1.47 billion.