KUALA LUMPUR (Aug 12): Tenaga Nasional Bhd (TNB) and Tan Chong Motor Holdings Bhd have become the latest companies to have secured a four-year extension to their power purchase agreements (PPAs) from the Energy Commission (EC).
The extension of the PPA period from 21 years to 25 years is for large-scale solar plants under the government's fourth competitive bidding programme, known as LSS4 or MEnTARI.
Other companies that received similar extension for their LSS4 projects this week included KPower Bhd and Ranhill Utilities Bhd.
The extension is in line with The Edge's report on Aug 2, which quoted sources as saying that LSS4 project owners would have their PPAs extended as the viability of some projects had been affected following a 30% to 50% jump in solar panel prices since the submission of bids in 2020.
In a filing on Friday (Aug 12), TNB said its indirect wholly owned unit TNB Bukit Selambau Solar Dua Sdn Bhd has received a notification letter from the EC with regard to the development of the group's 50-megawatt LSS project in Bukit Selambau, Kedah.
The EC also agreed to the extension of the project's financial closing date (FCD) from June 30 to Sept 30, and the scheduled commercial operation date to Dec 31, 2023.
TNB said the project is on track to achieve the FCD before Sept 30.
In a separate filing, Tan Chong said its indirect 51%-owned subsidiary TC Sunergy Sdn Bhd has received a notification letter from the EC for the unit's development of a 20-megawatt LSS project in Hulu Selangor.
The EC has notified TC Sunergy that the effective period of the PPA will be extended to 25 years from 21 years, provided that the related agreements for TC Sunergy's right to occupy and use the land for the LSS project be extended and aligned for a period of 25 years.
TNB shares ended the day five sen or 0.58% higher at RM8.63, with a market capitalisation of RM49.6 billion.
Tan Chong shares finished unchanged at RM1.13, valuing the company at RM759.4 million.