KUALA LUMPUR: Shares of Tenaga Nasional Bhd (TNB) rose 18 sen or 1.21% to RM15 yesterday following reports that the government-linked company may take over the Project 3B power plant that is to be constructed in Jimah, Negeri Sembilan. At closing, it eased to RM14.88, up six sen or 4%, after some 9.32 million shares changed hands, giving it a market capitalisation of RM83.976 billion.

The Edge weekly had reported that TNB (fundamental: 1.3; valuation: 1.8) might step in to take over the delayed 2,000mw coal-fired power plant Jimah East as government-owned 1Malaysia Development Bhd (1MDB) wrestles with financial difficulties and the listing of its power assets.

It reported that the Energy Commission (EC) feared any further delay in the construction of the power plant, which is expected to begin operations in November 2018. The financing and development of the power plant is a 70:30 joint venture between 1MDB and Mitsui and Co in Jimah East Power Sdn Bhd.

The possible roping in of TNB follows the tight deadline for 1MDB to secure RM8.4 billion by mid-April to finance the construction and development of the Jimah East power plant. Failure to secure the funding could jeopardise the listing of its energy unit Edra Global Energy Bhd, which has already been postponed several times.       

TNB is also reportedly seeking a two-month extension to submit documentation for the 1,100mw to 1,400mw gas turbine plant it is developing with Sultan of Johor’s SIPP Engineering Sdn Bhd.   However, the extension sought by TNB is unlikely to cause a serious delay to the project, the report stated.

This article first appeared in The Edge Financial Daily, on February 10, 2015.