KUALA LUMPUR: has inked a landmark 40-year power purchase agreement (PPA) through its 70%-owned unit Oriole Hydro Padas Sdn Bhd (OHP) with Sabah Electricity Sdn Bhd (SESB) for a 162MW run-of-river hydroelectric project at Hulu Sungai Padas in Sipitang, Sabah.
The RM2.8 billion initiative is one of Sabah’s largest renewable energy investments and has secured all required land and resource approvals from the state government. The project operates under a build-own-operate-transfer (BOOT) structure, with commercial operations slated for June 1, 2029 — slightly later than the originally projected December 31, 2028.
Once operational, the project is expected to contribute approximately RM300 million in annual recurring revenue to the group.
Key PPA Terms:
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Annual Firm Energy Quantity (AFEQ): SESB will purchase up to 868,894MWh/year at 31.5 sen/kWh.
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Maximum Annual Allowable Quantity (MAAQ): Up to 950,222MWh, sold at the same rate on a willing-buyer, willing-seller basis.
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Excess output: Any generation above the MAAQ can be sold at eight sen/kWh, also based on mutual agreement.
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Renewable Energy Certificates (RECs): Valued up to RM10.1 million, with surplus value shared equally with SESB.
The hydropower project employs a run-of-river cascading system, ensuring minimal environmental disruption while preserving natural river flow and surrounding ecosystems.
Socio-Economic and Industrial Upside:
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Jobs: ~2,000 construction jobs and 150 high-skilled roles during operations.
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Talent pipeline: Jentayu is collaborating with local universities to develop skilled talent in clean energy.
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Local manufacturing: The group is exploring a JV with a global turbine manufacturer to set up a facility in Sabah, boosting the state’s role in the regional energy value chain.
Executive Chairman Datuk Beroz Nikmal Mirdin emphasised the company’s commitment to “localising production and elevating Sabah’s status in the energy sector,” aligning with ambitions for a high-income, innovation-driven economy.
EPC Contract Awarded
The engineering, procurement, construction, and commissioning (EPCC) contract has been awarded to a consortium led by XD Power Transmission Sdn Bhd (a unit of China’s Xi’an Electric Engineering Co Ltd), PT Anhe Konstruksi Indonesia, and Jawat Johan Sdn Bhd. The award follows a transparent international tender launched in May 2023, which saw eight firms purchase tender documents and four final submissions.
The special purpose vehicle, OHP, is owned 70% by Jentayu’s subsidiary, 20% by SESB subsidiaries, and 10% by Yayasan Sabah.
Trading in Jentayu shares was temporarily halted on Monday for the announcement. As of 10:33 a.m., the stock was up 2% to 51 sen, bringing its market capitalisation to RM226.9 million. The counter has gained 18.6% year-to-date.
