Tenaga Nasional Bhd (TNB) has signed a power purchase agreement (PPA) with Tadmax Resources Bhd’s special-purpose company, Pulau Indah Power Plant Sdn Bhd (PIPP), for the sale and purchase of electricity generated from Tadmax’s Selangor power plant.
PIPP is 40%-owned by Tadmax, while Worldwide Holdings Bhd holds 35% and Korea Electric Power Corp owns 25%. The PPA will last 21 years from the commercial operation date of the first generating block, which is expected on January 1, 2024.
The government had previously awarded Tadmax the right to develop a new combined cycle gas power plant in Pulau Indah, Selangor, following which Tadmax is required to enter into a PPA with TNB.
PIPP will construct, own, operate and maintain a gas-fired combined cycle electricity generating facility with a total nominal capacity of 1,200 megawatts proposed to be located at Pulau Indah.
The signing of the PPA will have a neutral impact on TNB’s earnings over the term of the agreement, since the generation cost is fully passed-through under the Incentive Based Regulation (“IBR”) mechanism, TNB said in an exchange filing last Friday.