Tenaga Nasional to take 1MDB’s 70% stake in Project 3B

Tenaga Nasional is the largest power producer in Malaysia.

National power producer Tenaga Nasional Bhd is to take over 1Malaysia Development Bhd’s (1MDB) 70 per cent stake in the Project 3B power plant, said Energy, Green Technology and Water Minister Maximus Ongkili on Thursday.

StarBiz reported that the Malaysian Cabinet had approved the deal, which will involved Tenaga taking over the majority stake held by 1MDB’s energy arm, Edra Global Energy Bhd.

“We considered all factors. We could have gone for open bidding because the project is late and there is a need to give a priority to Tenaga. We believe Tenaga can do it at the rate that is acceptable and fast,” Ongkili told reporters at Parliament lobby Thursday.

The MYR11bil Project 3B involves is a 2,000MW coal-fired plant in Negri Sembilan, adjacent to where the Jimah Power Station is located. Tenaga has a 25 per cent stake in the Jimah Power Station, and 1MDB the rest.

The project was to have been developed under a consortium known as Jimah East Sdn Bhd, which is jointly owned by 1MDB and Mitsui Corporation Limited on June 3 last year.

1MDB owns 70 per cent while Mitsui controls 30 per cent of the project.Ongkili said Tenaga requested for a “small revision” to the power tariff owing to the delay of the project and changes in currency rate.

However, Ongkili said the new rate has yet to be finalised between Tenaga and the government.

In May, StarBiz reported that Tenaga had taken over the mandate from 1MDB for the 2000MW coal-fired power plant, known as Project 3B. The award of Project 3B to 1MDB-Mitsui was deemed contentious.

The 1MDB-Mitsui consortium won the project in March 2014 at a levelised tariff of 25.33 sen per kilowatt hour (kWh), ahead of early favourite YTL Power International Bhd and its joint venture partner SIPP Energy Sdn Bhd, that offered a lower levelised tariff of 25.12 sen/kWh.

The Energy Commission had explained that the YTL-SIPP consortium had lost the bid to 1MDB-Mitsui on technical grounds. However, 1MDB has had difficulty taking the project off the ground due to cash flow problems; hence, the need for Tenaga to step in.

The government has to ensure that Project 3B takes off as the country needs the electricity at the lowest cost, StarBiz noted.

Also read:

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.