PETALING JAYA: Cooling Energy Supply Sdn Bhd (CES), a joint venture between Tenaga Nasional Bhd’s wholly owned subsidiary TNB Engineering Corporation Sdn Bhd (TNEC) and Airport Ventures Sdn Bhd (AVSB) today entered into a concession agreement with Malaysia Airports (Sepang) Sdn Bhd (MA Sepang) for the operation, maintenance and upgrade of a district cooling co-generation plant for the business of producing, selling, marketing, distributing and supplying cooling energy and electricity at Kuala Lumpur International Airport (KLIA) for 20 years.
The total project cost for the joint venture is RM183 million and will be funded through a combination of external borrowings by the concessionaire and shareholders’ equity.
The concession period will commence on July 1, 2021 when all of the conditions precedent under the concession agreement have been satisfied or waived.
TNEC will hold 70% equity while AVSB will hold the remaining 30% equity in the concessionaire.
The concessionaire will carry out engineering, procurement, construction, testing and commissioning works (EPCC) for improvement, upgrading and overhaul of certain aspects of the plant and area of the customers, and EPCC works for conversion of the co-generation plant to all-electric plant.
The concessionaire will operate and maintain the co-generation plant starting from the commencement date until the conversion works are completed as certified accordingly, which is targeted to be achieved within 24 months during which the plant will supply electricity to MA Sepang.
Following completion of the conversion works, the plant will generate and supply cooling energy to the customers and offtake electricity from MA Sepang for the remainder of the concession period.
On the last day of the concession period, the concessionaire will, at no cost to MA Sepang, transfer the plant, the joint venture project site and such other assets to MA Sepang or its nominee in a state and condition that meets the transfer requirements.
“The joint venture will facilitate the cooperation between TNB, TNEC and MAHB for the plant to supply cooling energy to KLIA’s surrounding facilities using reliable, modern and efficient technology. TNEC will be investing in technology and system upgrades for the existing plant.
“This venture is part of TNB’s rigorous efforts in promoting and providing sustainable energy solutions to its customers in line with its aspiration to brighten lives through innovative and sustainable solutions towards a better world,“ TNB said.
Barring any unforeseen circumstances, the conditions precedent and other consents and/or approvals are expected to be satisfied or obtained on or prior to June 30, 2021 or such other dates as the concessionaire and MA Sepang may mutually agree upon.
