Malakoff eyes expansion - MIDA | Malaysian Investment Development Authority
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Malakoff eyes expansion

Malakoff eyes expansion

02 Nov 2023

Malakoff Corp Bhd plans to increase its market share by seeking opportunities to expand its portfolio of rooftop solar, grow in terms of large-scale solar (LSS) projects and engage in potential mergers and acquisitions (M&As), says managing director and chief executive officer Anwar Syahrin Abdul Ajib.

In achieving its 1,400 megawatt (MW) renewable capacity target by 2031, Anwar said it is a market share game. The company’s market share is now between 15% and 20%.

“But bear in mind, there are the likes of Gentari, GSPARX and Solarvest. However, Solarvest is more engineering, procurement, construction and commissioning. Asset owners-investors are not many, so we are basically in a different space so to speak.

“Time is running out (in achieving the 1400 MW target). It is also a way for us to neutralise the fact that we have a lot of thermal plants and people criticise us for not doing enough.

“So, this is a commitment in terms of trying to reduce or offset the greenhouse gases that we generate from our power plants,” he said during a signing ceremony yesterday between the firm and DRB-Hicom Bhd-owned companies.

Anwar said Malakoff remains confident of achieving its 1,400 MW target as the company has the financial strength and the capabilities to do so.

“Even if we do get about half of that, I will say that is an achievement on its own.

“I think we are competitive and my people are very driven. When we actually made the announcement, we rebranded this organisation, so it is a transition, it is a transformation of Malakoff.

“Hence, by hook or by crook we have to make it happen. This is a big commitment from the organisation,” he said.

Malakoff inked a solar power purchase agreement (SPPA) through its subsidiary Malakoff Radiance Sdn Bhd with DRB-Hicom-owned companies for the development, operation and maintenance of solar photovoltaic systems at 14 locations in Selangor, Perak, Kedah, Melaka and Pahang.

The companies are Motosikal dan Enjin Nasional (Modenas) Sdn Bhd, PMB Properties Sdn Bhd, Isuza Hicom Malaysia Sdn Bhd, Hicom Automotive Manufactures (M) Sdn Bhd, CTRM Aero Composites Sdn Bhd, Hicom Teck See Manufacturing Malaysia Sdn Bhd, DRB-Hicom, DRB-Hicom Defense Technologies Sdn Bhd, Defence Services Sdn Bhd and PHN Industry Sdn Bhd.

With a total capacity of 20.78 MW peak and total electricity generation of 26,546.45 MWh per annum, this project is expected to play a role in making a substantial contribution to an annual reduction of 20,706 tCO2e equivalent to a carbon sequestration of 23,204.56 acres of forest, offsetting Co2 from the atmosphere.

“We have already installed 14.6 MW, so roughly the investment value of the SPPA is RM50mil. The total is dependent on when we get more from them.

“For the time being we are working on about another 10 MW. They are happy with what we have installed so far so there are opportunities for us to expand beyond the existing SPPAs that we have signed with them.

“The DRB group is very big and there are a lot of companies with a lot of rooftops, and they are predominantly in the space of manufacturing, so we need to actually try and do more with them,” he said.

Anwar said the amount of energy savings the companies will see is dependent on the solar irradiance.

“I will say the minimum is between 30% and 40%, but some are seeing a lot more savings on their electricity bill,” he said.

The implementation of solar energy at DRB-Hicom’s facilities also serves as another stepping stone for Malakoff in achieving a 500 MW target of solar projects within the Albukhary group of companies.

“It (achieving 500 MW) is going to be part of the 2031 target timeframe, because it takes time. We only can do so much in a year and these kinds of projects, normally not that many, are large scale. So each location can be between one and two MW.

“This is just DRB, we have Tradewinds, and MMC Ports that we have signed. So, it is a lot of heavy lifting,” Anwar said.

Malakoff is expected to invest around RM2.5bil to develop the 500 MW of solar projects.

“There is only so much equity that we can put in.

“If everything is in cash, then we will be out of cash for other purposes. So normally we go 80:20; 80 debt and 20 cash. Normally that is the kind of structure that we have in place,” Anwar said.

Anwar added that the company is very opportunistic in terms of its overseas expansion and this is not limited to just solar but also water as the company is already in that space.

“Just as a recap, we are at the top five when it comes to water production capacity in the Middle East. We produce about 472,000 cubic metres per day. So we are very opportunistic in terms of looking at the market.

“We have not really explored, for example Asean. So we need to actually take a look at the market over there provided that the regulatory framework is in our favour, because it is not easy doing business outside of Malaysia,” he said.

Source: The Star