KUALA LUMPUR: A consortium of lenders led by OCBC Bank (Malaysia) Bhd is financing a large-scale-solar (LSS) plant in Bukit Keteri, Perlis, setting benchmarks for green syndicated project financing involving LSS plants in the country.
OCBC Bank said the project financing structure for project owner KBJ HECMY Sdn Bhd (KHSB), was aligned to meet the Asia Pacific Loan Market Association’s Green Loan Principles to ensure global acceptance and benchmarking.
OCBC Bank is the bookrunner and mandated lead arranger of the syndicated project financing.
KHSB, a joint venture between Hanwha Energy Corporation Singapore Pte Ltd (HECS) and Konsortium Berseri Jaya Sdn Bhd (KBJ), will use the proceeds from the facility to part-finance the development of a 30MW solar plant in Perlis.
It was one of the successful bidders under Package P3 (10MWa to 30MWac) of the Energy Commission’s LSS2 tender programme.
The solar plant is expected to commence commercial operations by the second quarter of 2020 under a 21-year power purchase agreement with Tenaga Nasional Bhd.
The project financing effort comes on the heels of the OCBC Group’s announcement last month that it would stop financing coal-fired power plants globally in order to inspire a shift to cleaner and greener sources of energy.
OCBC Bank’s managing director/senior banker (client coverage) and head of investment banking Tan Ai Chin said OCBC Bank was committed to the development of renewable energy in Malaysia, in support of the government’s target to increase its generation mix from renewable energy to 20 per cent by 2025.
"Our two-pronged approach is to first cease financing coal-fired power plants and then replace them with greener alternatives such as the LSS plant in Perlis.
“This syndicated green project financing is a testament of our pledge towards financing sustainable developments as we seek to ramp up efforts to increase the percentage of renewable energy projects in our portfolio,” she said.
HECS chief executive officer Du-Hyoung Ryoo said the initiative had brought together the industry’s leading players in solar PV engineering, procurement, construction and manufacturing under one consortium.
“This is our first venture in Malaysia as a solar PV plant developer and we are hopeful the project will be a benchmark for future related LSS plants in the region,” he said.
HECS is a wholly-owned subsidiary of Hanwha Energy Corporation, a multinational energy solutions provider.
Hanwa Energy, in turn is part of the Hanwha Group, one of the largest business conglomerates in South Korea with business interests spanning chemicals and materials, aerospace and mechatronics, construction, financial services, leisure and lifestyle and energy.