KUALA LUMPUR: Kejuruteraan Asastera Bhd's (KAB) wholly-owned subsidiary KAB Energy Holdings Sdn Bhd, has received approval from shareholders to acquire a mini hydropower plant in Indonesia.
In a statement today, the company said the motion was passed at the extraordinary general meeting held today to acquire PT Inpola Mitra Elektrindo (PT IME), which owns and operates an 11MW mini-hydropower plant in Pakpak Bharat, North Sumatera.
The cost of the acquisition is comprises of the sale shares consideration of RM10,000 and the settlement of debts, liabilities, and shareholders advances of PT IME capped at RM74.99 million.
The power plant was developed, owned, and operated by PT IME under a power purchase agreement (PPA) with PT Perusahaan Listrik Negara (PLN), the state-owned electricity company of Indonesia.
The PPA has an initial concession period of 20 years from the commercial operation date, which was achieved on October 12, 2021.
Upon completion of the acquisition, KAB will see a stable and recurring income stream from PT IME's mini-hydropower plant, as per the PPA with PLN.
KAB group managing director Lai Keng Onn said the acquisition marks an exciting milestone for the company as it provides a stable recurring source of income and gives a direct foothold in the lucrative hydropower industry.
He added that this move is in line with the company's overall business strategy in expanding its suite of solutions for the sustainable energy solutions (SES) segment to meet customers' ever-growing needs.
"Moving forward, KAB is committed to pursuing larger and more ambitious sustainable energy projects to drive the growth of the SES segment further as global demand for such solutions continues to rise.
"The company anticipates that the SES segment would be the main contributor as in-line with anticipated improvement in financial performance and eventually achieve more than 50 per cent operating profit contribution in the foreseeable future," he said.