KUALA LUMPUR: Tenaga Nasional Bhd's (TNB) subsidiary, TNB Power Generation Sdn Bhd (TNB Genco) will develop the RM5.0 billion 300MW hydroelectric power plant at Mukim Ulu Nenggiri, Jajahan Gua Musang, in Kelantan.
In an exchange filing today, TNB said it had received a letter of notification from the Energy and Natural Resources Ministry (KeTSA) for TNB Genco to the project.
"The letter of the notification requires TNB Genco to fulfil certain requirements before the execution of the project," it said.
TNB said the project would be financed through a combination of debt and equity, and the transaction is not subject to TNB shareholders' approval.
"Any debt to be raised will increase TNB's consolidated gearing, the quantum of which is dependent on the amount borrowed," it added.
However, TNB said the project is not expected to have a significant material effect on the company's gearing position.
TNB Genco has incorporated a wholly-owned project company named TNBPG Hydro Nenggiri Sdn Bhd (THNSB) to undertake the project.
"The construction works of the project is estimated to take five years, and its expected scheduled commercial operation date (SCOD) is on June 1, 2027."
The utility company said the project would enhance energy security for the nation and bring about a positive socio-economic impact for Malaysia, Kelantan and the local communities.
TNB said the project would bring additional benefits to Kelantan regarding flood mitigation, cleaner water supply and raw water supply for irrigation.
The project would also reinforce the security of energy supply in Peninsular Malaysia, particularly to the eastern region, while ensuring TNB play its role in balancing the energy trilemma for the nation.
TNB said the strategic national hydroelectric project would be the company's mission to support the government's ambition to increase the share of renewable energy (RE) in its installed capacity to 31 per cent in 2025 and 40 per cent in 2035 under its power generation plan.
"The project will increase TNB's generation market share, particularly from hydro and improve the overall efficiency of our generation asset portfolio, including RE," said TNB.
The project will increase its generation market share, particularly from hydro sources and improve the overall efficiency of its generation asset portfolio.
"This is aligned to our strategic aspiration to be a leading provider of sustainable energy solutions in Malaysia and internationally," it added.
The project is expected to be earnings accretive to the company upon its SCOD.
TNB Genco's technical expertise and financial strength capabilities would ensure completion of the project, said TNB.