KUALA LUMPUR: Hong Leong Investment Bank (HLIB) research estimates that solar engineering, procurement, construction and commissioning (EPCC) jobs from Large Scale Solar 5 (LSS5) alone will hit RM7 billion, with quota winners likely to be announced in the first half of 2025.
The research firm's note comes after Energy Transition and Public Utilities Minister Datuk Seri Fadillah Yusof announced a series of energy transition programmes and initiatives for 2024 last week, having considered grid capabilities, green energy demand and multiplier effects.
HLIB research said the fifth bidding cycle of the Large Scale Solar (LSS) programme making a comeback with a significantly upsized quotas of 2GW (floating solar: 500 megawatt (MW), was a key highlight.
The request for proposal (RFP) will be available for purchase from Energy Commission from April 1, 2024 onwards.
"We are conservatively estimating solar EPCC opportunities of ~RM7bn from the LSS5 programme. While granular details were by and large missing, quota awards for LSS5 could come in 1HCY25 with EPCC contracts to be formalised thereafter," it said.
It is unclear if foreign participation limits will still be in place as it was with LSS4 considering the increased scale. "Nevertheless, we reckon with panel prices continuing to decline (~USD11 cents/watt) bid tariffs could reach a new low," HLIB research said.
Overall, it views the cumulative 2.8GW of new renewable energy (RE) quotas announced through various programmes, significantly uplifting for the sector and for both stocks under coverage.
It sets in motion the government's 2050 70 per cent RE share target as outlined in the National Energy Transition Roadmap (NETR) unveiled last year.
It made no changes to its "Overweight" rating on the RE sector.
HLIB research said the sector rides onstrong structural themes as well as positive earnings growth cycle.
It has Buy calls on Solarvest Holdings Bhd (target price (TP): RM1.55) and Samaiden Group Bhd (TP: RM1.43) are key winners from the slew of programmes announced.
Key catalysts include contract rollout, fresh RE quotas and export news flow. Risks include execution and slow implementation. -ends-