KUALA LUMPUR: Tenaga Nasional Bhd (TNB), through its wholly-owned special purpose vehicle company, TNB Bukit Selambau Solar Dua Sdn Bhd (TBSS), has secured financing up to RM185 million for Large Scale Solar Mentari (LSSM) in Bukit Selambau, Kuala Muda, Kedah.
This is also TNB's third large-scale solar (LSS) project in Bukit Selambau under the government's Large Scale Solar@Mentari or Large Scale Solar 4 (LSS4) program.
CIMB Islamic Bank Bhd will provide the project's RM185.0 million debt funding.
In a statement today, the national utility company said TBSS completed the financial close on 30 September 2022 as scheduled.
The solar project capacity is 50MWac, and TBSS is expected to achieve its commercial operations in December 2023.
The solar farm is being developed on 175 acres of land next to TNB's second LSS in Bukit Selambau.
TNB noted that with the prevailing challenging market conditions, this is a significant achievement that the project has achieved its financial close, enabling financing for the LSS project.
This success has been partly attributed to the Energy Commission's support in approving a 4-year power purchase agreement (PPA) extension from 21 years to 25 years.
TNB president and chief executive officer Datuk Indera Ir Baharin Din described the LSS project as a step forward towards achieving its sustainability pathway and environmental, social, and governance (ESG) targets, ensuring continued business growth for the national utility company.
"The LSS project will contribute to the energy transition that will also open up new opportunities for TNB's business growth and long-term sustainability and spur new economic catalysts for Malaysia," he said.
He said 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.
On 19 August 2021, TBSS signed a 21-year PPA to develop the LSS facility.
TNB chief new energy officer Zarihi Hashim said that with a proven track record in managing more than 600MW RE assets of both solar and wind in domestic and international markets, TNB has the capability of developing large-scale solar projects.
"TNB will continue to support the Malaysia Renewable Energy Roadmap (MyRER) targets and explore investment opportunities in Malaysia's RE sector," he said.
Further, this project is expected to drive growth in clean and green energy demand within the region in the coming years, and it reflects TNB's latest milestone in its continuous support of the nation's aspiration of achieving 31 per cent installed RE capacity by 2025 and 40 per cent by 2035.
TNB's RE gross portfolio currently is 2844MW in Malaysia and 993MW across the UK, Turkey and India, comprising mainly solar, wind and hydro energy generation assets.
TNB's first LSS in Sepang, Selangor, with a capacity of 50MWac (78MWdc), has been operating since November 2018, while its second LSS in Bukit Selambau, with 30MWac in September 2020.
TNB obtained these two projects through LSS1 and LSS2 bids, respectively.