Malaysia: Tenaga buys 50% in UK solar power asset for $607m

Tenaga Nasional is the largest power producer in Malaysia.

Malaysian state-owned power company Tenaga Nasional Bhd (TNB) has acquired a 50 per cent stake in Britain’s 365 MW solar power asset from a subsidiary of Terraform Power Inc for $607.6 million (GBP 470 million).

In an announcement on Monday, TNB said, the acquisition achieves a key objective of TNB’s five-year international expansion plan to acquire up to 250 MW capacity of renewable energy projects by 2020.

The acquisition, which is the first such by TNB in the renewable energy asset in Europe, is funded through $750 million sukuk proceeds issued by the company in October last year.

The deal was done through Vortex Solar UK Limited, an indirect subsidiary of a TNB joint venture, Vortex Solar Investments which acquired a 100 per cent interest in the portfolio. TNB has a 50 per cent shareholding in Vortex with Beaufort Investments S.a.r.l. which holds the balance of 50 per cent.

“Vortex Solar UK signed a Sale and Purchase Agreement in January with a subsidiary of Terraform Power Inc. to acquire the solar portfolio which includes 24 solar photovoltaic farms, Britain’s third largest solar power business,” TNB said in a filing.

‘The assets are an excellent investment which are immediately earnings enhancing with 80 per cent of revenue under long term, 15-year power purchase agreements and subsidized by Renewable Obligation Certificates for the next 20 years,’ said TNB CEO Datuk Seri Ir. Azman bin Mohd.

With the completion of the acquisition, Tenaga’s international renewable energy portfolio will have a combined net installed capacity of 252 MW following acquisitions in power companies in India and Turkey in 2016. TNB had acquired a 30 per cent stake in India-based GMR Energy for $300 million and another 30 per cent in Turkey’s Gama Enerji for $243 million.

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