UEM Lestra secures offtakers for solar plant, commits RM2.5bil for Phase 1

KUALA LUMPUR: UEM Lestra Berhad, the green industries arm and wholly owned subsidiary of UEM Group Berhad, has secured commitments from offtakers for its one-gigawatt (1GW) hybrid solar power plant project under the Malaysian Government's Corporate Renewable Energy Supply Scheme (CRESS).

This initiative aligns with the National Energy Transition Roadmap (NETR).

The hybrid solar power plant will be built on a 1,700-acre site in Segamat, Johor, with an estimated investment of RM2.5 billion for its first phase. 

The project will include a 500 megawatts of alternating current (MWac) interconnection point and around 750  megawatts peak (MWp) of solar capacity, supported by a battery energy storage system (BESS). 

Once operational, it is expected to generate over 1,000 GWh of green energy annually.

Lestra Hexa JV Berhad, a joint venture between UEM Lestra (holding a 51 per cent stake) and HEXA Renewables, owned by I Squared Capital, announced Hong Kong-based ESR Group as a key offtaker. 

ESR Group, a leading Asia-Pacific real asset management company and parent of Logos Infrastructure Holdco Pte Ltd, will procure green energy from the project's initial phase.

A document exchange ceremony on Jan 16, 2025, was witnessed by Deputy Prime Minister and Minister of Energy Transition and Water Transformation (PETRA) Datuk Sri Fadillah Yusof, alongside PETRA Deputy Minister Akmal Nasrullah Mohd Nasir and other senior officials.

UEM Lestra was represented by its chief executive officer (CEO), Harman Faiz Habib Muhamad, while ESR Group was represented by David Aboud, its head of Malaysia.

This marks the first project under the CRESS initiative, introduced in September 2024 by PETRA and implemented by the Energy Commission. The scheme enables corporate consumers to access green electricity via third-party providers, supporting their environmental, social, and governance (ESG) goals.

The project is expected to commence operations by the end of 2027. The involved parties aim to finalise the Bilateral Electricity Supply Contract in the coming months.

UEM Lestra CEO Harman Faiz emphasised the significance of the project.

"The launch of the CRESS program by the government and our NETR hybrid solar power plant project are evidence of Malaysia's steadfast commitment to sustainable energy solutions. These pivotal initiatives not only address off-takers' demands but also pave the way for a sustainable future for Malaysia through renewable energy."

"The involvement of ESR will further enhance the viability of this national endeavour. We are eager to collaborate with all involved parties, including the Johor state government, to ensure the successful implementation of this ambitious project, which has the potential to attract more foreign direct investment, create quality jobs, and foster economic growth while simultaneously advancing Malaysia's renewable energy landscape," added Harman.

Khazanah Nasional, the parent company of UEM Group, strongly supports Malaysia's energy transition and net-zero targets.

Through investments spearheaded by UEM Group and UEM Lestra, the development of large-scale solar projects is expected to enhance domestic investments and contribute significantly to Malaysia's renewable energy objectives.

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