KUALA LUMPUR (June 9): PLB Engineering Bhd’s 65%-owned subsidiary PLB Terang Sdn Bhd (PLBT) has entered into a memorandum of understanding (MoU) with Welle Environmental & Renewable Energy Sdn Bhd to jointly set up a municipal solid waste-to-energy (WTE) plant in Penang.
According to a filing with Bursa Malaysia, the plant will have a capacity of 1,000 metric tons per day.
According to PLB, the MoU will enable PLBT to tap into the “reputation, experiences and standing of Welle and its related China company in waste management and power generation projects”.
The project will also diversify PLBT’s income stream and contribute to its profitability in the future, the parent company added.
“The obligations of Welle are to procure the entire funding cost of the build, operate and transfer (BOT) of the WTE project. In addition, all technology development costs related to the WTE project are to be funded entirely by Welle and/or its related China company.
“PLBT’s obligation is to secure a waste disposal concession of not less than twenty five years from the government of Penang with suitable tipping fees and also to secure a power purchase agreement with the government of Malaysia. PLBT is also required to identify, propose and procure a suitable site for the WTE plant in the Pulau Burung landfill area in Penang,” said PLB.
Under the MoU, PLB said Welle shall acquire shares in PLBT in a composition to be mutually agreed.
Meanwhile, the investment structure of the new WTE project will be finalised in a later stage.
PLB said the MoU will not have any effect on its issued share capital and substantial shareholders’ shareholdings, or the group’s earnings per share (EPS), net asset per share and gearing for the financial year ending Aug 31, 2020 (FY20).
The MoU will be in place for six months, unless extended by both parties in writing, added the group.
PLB shares were not traded today. Its last closing price was RM1.19 on June 4, valuing it at RM126.83 million.