KUALA LUMPUR (Oct 14): Tenaga Nasional Bhd's (TNB) unit has secured financing of up to RM185 million from CIMB Islamic Bank Bhd for its third large-scale solar project in Bukit Selambau, Kuala Muda, Kedah.
The project, with a capacity of 50MWac (75MWdc), is part of the government's Large Scale Solar @ Mentari or Large Scale Solar 4 (LSS4) programme.
In a Bursa Malaysia filing on Friday (Oct 14), TNB said its wholly owned special-purpose vehicle TNB Bukit Selambau Solar Dua Sdn Bhd, which is expected to achieve commercial operations in December next year, successfully completed the financial close on Sept 30 as scheduled.
The solar farm is being developed on an area of 175 acres, next to TNB's second large-scale solar facility in Bukit Selambau.
"With the prevailing challenging market conditions, it is a significant achievement that the project has achieved its financial close, enabling financing for the [large-scale solar] project.
"This success has been partly attributed to the Energy Commission's support in approving a four-year extension of the power purchase agreement (PPA) from 21 years to 25 years," said TNB.
TNB Bukit Selambau on Aug 19 last year signed a 21-year PPA for the development of this large-scale solar facility.
The utility giant's first large-scale solar facility in Sepang, Selangor, with a capacity of 50MWac (78MWdc), has been operating since November 2018 while its second large-scale solar facility in Bukit Selambau with 30MWac (45MWdc) started operating in September 2020.
TNB said these two projects, which were obtained through LSS1 and LSS2 bids, mitigated up to about 85,016.56 tonnes of carbon dioxide equivalent or carbon sequestered by 2.12 million trees per year, or by taking 18,318 gasoline-powered passenger vehicles off the road for one year.
The group's president and chief executive officer Datuk Indera Baharin Din said the latest large-scale solar project is a step forward towards achieving TNB's environmental, social and governance targets.
"The [large-scale solar] project will contribute to the energy transition that will also open up new opportunities for TNB's business growth and long-term sustainability, as well as spur new economic catalysts for Malaysia," he said.
He added that TNB aims to grow its overall renewable energy (RE) portfolio to 7,000MW by 2030 excluding large hydro, in line with TNB's aspiration to achieve net zero and coal free by 2050.
TNB's RE gross portfolio currently is 2,844MW in Malaysia and 993MW across the UK, Turkey and India, comprising mainly solar, wind and hydro energy generation assets.
TNB's share price, which has fallen 9.5% year-to-date, went up two sen or 0.25% to RM8.09 at the time of writing on Friday, giving it a market capitalisation of RM46.54 billion.