Malaysia’s Tenaga to invest RM20b to fast-track energy transition

MALAYSIAN utility Tenaga Nasional Bhd (TNB) aims for capital expenditure of about RM20 billion (S$6.2 billion) annually over the next 28 years to fast track its energy transition plans, the company said on Wednesday (Aug 17).

The investments will help Tenaga reach net zero emissions by 2050 and “open opportunities in more than doubling its earnings before interest and taxes (EBIT)“, Baharin Din, its president and chief executive, said in a statement.

Tenaga, in which sovereign wealth fund Khazanah Nasional is the biggest shareholder, aims to grab a bigger share of a clean energy market it estimates to be worth between RM65 billion and RM80 billion in Malaysia by 2050.

The company targets to have its power generation unit TNB Genco take RM40 billion of it, the company said this month.

Last week Reuters reported that Tenaga planned to begin the process next year for a potential US$1 billion listing of the unit, citing sources close to the matter.

“TNB’s decarbonisation plan will increase the enterprise value of Genco for the possibility of an initial public offering,” Baharin said on Wednesday.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

The company is also exploring gas and hydropower projects in South-east Asia, with a target capacity of 800 megawatts by 2050, he added.

Its new energy division will expand its renewable portfolio by targeting capacity of 14.3 gigawatts by 2050 with an equity investment of US$7 billion, Baharin said.

The unit will grow its solar and wind investments in existing markets in Malaysia and Britain, and new markets such as Spain and Vietnam, he added.

Tenaga will also invest RM90 million over the next 3 years on projects to spur domestic adoption of electric vehicles (EV), Baharin said.

The company is targeting 500,000 cars by 2030, bringing in annual electricity revenue of RM1.25 billion, he added. REUTERS