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Support for local RE players crucial

Support for local RE players crucial

04 Dec 2023

Citaglobal Bhd believes a comprehensive and practical policy and framework which provides full support to local players is essential to move the national renewable energy (RE) agenda a step further.

Its executive chairman and president Tan Sri Mohamad Norza Zakaria said the group is ready and confident to execute its new RE-related projects, in line with the policies and framework to be implemented by the Federal Government.

“We want to highlight to the Government that we are fully supportive of the policies and we are more than ready and eager to start as soon as possible,” he told StarBiz.

A binding agreement ceremony of Citaglobal and TIZA Global Sdn Bhd as a consortium, together with Abu Dhabi Future Energy Company PJSC (Masdar), was signed on Dec 1, 2023 at the Conference of the Parties of the UNFCCC (COP28).

This agreement was witnessed by His Majesty KDYMM SPB YDPA and His Highness Sheikh Mohammed bin Zayed Al Nahyan, President of UAE, with a total development cost of approximately RM9.75 bil.

Added to the earlier memorandum of understanding (MoU) signed with Shanghai SUS Environment Co Ltd for waste-to-energy (WTE) projects in October 2023, which is estimated to inject another RM15bil to Malaysia’s foreign direct investment (FDI), Norza believes the government and Citaglobal are working hand-in hand to jointly encourage more FDis into Malaysia.

“We together with support from the Government have brought in these foreign investments, and of course, these foreign investors would hope for some support and assistance from our government either in the forms of incentives or policies relaxation which are competitive with regional countries.

We hope the government will help to facilitate, and we will also play our part,” he said.

In relation to the recent binding agreement with Masdar, Norza said it shows that Project 2 gigawatt (GW) is a progression from an MoU to an actual binding agreement.

“This shows the intention of the parties to work together and it isn’t just talk. It took us about 6 to 7 months, from MOU to JDA and this demonstrates clearly that if all stakeholders work together, projects can be materialised.”

He added that Citaglobal is looking at a capital structure of around 20% to 30% in equity and balance in debt financing from the development of the 2GW farm in Pahang.

The project involves the proposed development of up to 2GW of RE and will see the construction of ground-mounted solar arrays, floating solar farms, and battery energy storage systems (BESS) across multiple sites in suitable land, dams, and lakes across the state.

Citaglobal has earlier secured a Letter of Intent from MRL for the ERCL Independent Power Producer Project (“IPP”), which we believe ERCL IPP Project will potentially be the off-taker for the 2GW project.

Norza said that Citaglobal’s overall strategy currently, is to build up its order book via being an EPCC or turnkey contractor.

Once it has grown in size over the next 5 to 10 years, Citaglobal will move to progressively become an asset owner.

This asset-light strategy is to ensure Citaglobal grows its balance sheet and capital structure in an orderly manner.

“We will certainly invest more in asset owners when our balance sheet is stronger,” said Norza.

Norza also said the reality is that Battery Energy Storage Systems (BESS) will be one of the largest components of renewable energy in Malaysia moving forward. This is due to the intermittency of energy supply, and the need to strengthen and stabilise the National grid.

Citaglobal is forefronting in this space with its first and only Malaysia-made and locally produced by Malaysian talents, engineers and subject matters expert BESS known as MYBESS, through a collaboration with Genetec Technology Berhad, a Main Board technology company listed on Bursa Malaysia, through a 50:50 consortium, Citaglobal Genetec BESS Sdn Bhd.

“One of our key competitive advantages and value proposition over other players is our MYBESS. This is where we and our technology partner, Genetec met up with Masdar and said, we have a Malaysian-made BESS, we are very competitive and we want to collaborate with you,” he stated.

This is said to be in line with Masdar’s aim to expand its presence within the Southeast Asian region, whereby Citaglobal said it will help Masdar realise.

Moving forward, Norza said this collaboration will keep the company busy, with the future looking good for Citaglobal.

“We are just at the beginning and many more new opportunities are knocking on our door, but we will only choose those that bring the most value to our shareholders,” he said.

He said that based on the group’s existing orderbook of more than RM1bil, the construction sector will temporarily contribute to the bulk of our profits while building for the renewable energy and telecommunication sectors.

“Nonetheless, it is our goal to transform to become an RE and telecommunication player in the future,” he said.

In addition, he stated the group is constantly looking for suitable partners who can join forces with Citaglobal to make the 2GW project a success.

Parties such as TNB Renewables Sdn Bhd, a wholly owned subsidiary of Tenaga Nasional Bhd, and SPIC Energy, a subsidiary of China State Power Investment Corp (SPIC), are among the external parties that have expressed interest to be a part of the 2GW project.

On a separate note, Citaglobal is one of the main sponsors of the Malaysian Pavilion in conjunction with the 2023 United Nations Climate Change Conference (COP28) with the intention of making a significant and powerful impact in the RE space in Malaysia as well as the region.

Source: The Star