KUALA LUMPUR: Malakoff Corp Bhd has signed several agreements including a heads of agreement (HOA) and a number of shareholder subscription agreements following a planned participation in a renewable energy (RE) project in Kelantan.

These are for the three upcoming hydroelectric plants, namely the Kemubu Small Hydropower Plant, Kuala Geris SHP and Serasa SHP, which have an installed capacity of 29 megawatts (MW), 25MW and 30MW respectively at Kuala Krai, Kelantan.

Malakoff said in a filing with Bursa Malaysia that it had signed the HOA with Rising Promenade Sdn Bhd (RPSB), RP Hydro (Kelantan) Sdn Bhd (RPHK) and Rising O&M Engineering Services Sdn Bhd (ROMES) that would detail each of their responsibilities in this upcoming partnership in the construction of three plants.

“The project will add a capacity of 84MW to Malakoff’s RE portfolio and it is expected to provide the company with a steady income flow, particularly through the dividend payment from the redeemable preference shares in RPHK.

“The project will accelerate Malakoff’s growth in the RE industry and advance its transition to cleaner energy sources as it moves towards a low carbon future,” it said.

The shareholders agreement would also see Malakoff participating in the project through shareholding stakes with the purchase of 70% ordinary shares and the subscription of up to 250 million (worth RM250mil) preference shares in RPHK.

There would also be the purchase of 70% ordinary shares in ROMES by Malakoff from RPSB for the project, it said.

In July 2018, RPHK was awarded by the Economic Planning Unit of the Kelantan state government to undertake the said project with a combined installed capacity of 84MW.

Following that, RPHK said it had entered into three separate RE Power Purchase agreements with Tenaga Nasional Bhd (TNB) on June 23, 2021 for the project’s eventual sale and purchase of RE from these plants to TNB, for a period of 21 years from the feed-in-tariff commencement date.

Malakoff said in its announcement that the estimated total cost of the project will be financed via the issuance of the Asean Green SRI Sukuk Wakalah and equity contribution based on a project financing structure with a finance to equity ratio of 80:20.