KUALA LUMPUR: Tenaga Nasional Bhd will build a 2x200MW coal-fired power plant in Kalimantan with PT PLN (Persero), the Indonesian state-owned utility company.
Both companies signed a Memorandum of Understanding (MoU) on the project yesterday.
TNB said the project was in line with its global expansion to secure new overseas generation capacity and its efforts to meet the rising demand for electricity in Sabah.
It noted that the MoU is for two years, whereby the parties involved would start exploring and studying the best business models, associated risks and financing options in relation to the project.
“The MoU is expected to be a win-win venture for both countries through the enhancement of bilateral cooperation and improvement in power supply stability for Sabah and Kalimantan,” TNB said in a statement.
The MoU also includes the supply and export of electricity from the proposed power plant to Sabah.
TNB holds an 83 per cent stake in Sabah Electricity Sdn Bhd (SESB) and the remaining 17 per cent is owned by the Sabah state government.
SESB provides electricity generation, transmission, and distribution services in Sabah.
The MoU was signed by TNB president and chief executive officer Datuk Seri Ir Azman Mohd with PLN president and CEO Sofyan Basir and SESB managing director Ir Abdul Razak Salim.
The project was first mooted by Prime Minister Datuk Seri Najib Tun Razak and Indonesian President Joko Widodo when both Asean leaders met during their bilateral meeting on the sidelines of the Indian Ocean Rim Association summit in Jakarta in March.