Jentayu Sustainables Secures 40-Year PPA with Sabah Electricity for Hydropower Project
Landmark Agreement for RM2.8 Billion Project
Jentayu Sustainables Bhd (JSB) subsidiary Oriole Hydro Padas Sdn Bhd has signed a power purchase agreement (PPA) with Sabah Electricity Sdn Bhd for its 162MW run-of-river hydropower development (Project Oriole) at Hulu Sungai Padas in Sipitang, Sabah.
40-Year Concession Period
The agreement formalises the sale and purchase of electricity from Project Oriole to Sabah Electricity over a concession period of 40 years commencing from the plant’s scheduled commercial operation date of June 1, 2029.
Expected Revenue and Job Opportunities
Once operational, Project Oriole is expected to generate approximately RM300 million in annual recurring revenue for JSB. The project is expected to create approximately 2,000 job opportunities during the construction period, with an additional 150 high-skilled job opportunities for the maintenance and operation of the plant post-construction.
Project Details
The project, which represents one of the largest renewable energy initiatives in Sabah to date, will involve the development of two hydropower plants in Sabah along Sungai Maligan and Hulu Sungai Padas. Using a run-of-river cascading scheme, Project Oriole employs low-impact hydropower technology that generates renewable energy while preserving the natural flow of rivers.
Key Terms of the Agreement
Under the terms of the agreement, Sabah Electricity will buy up to 868,894 MWh of electricity each year at RM0.315 per kWh. If more energy is generated, up to a maximum of 950,222 MWh, Sabah Electricity can also buy that extra amount at the same rate if both sides agree. Any energy produced beyond 950,222 MWh can be sold at RM0.08 per kWh if both parties agree.
JSB’s Commitment to Sustainability
JSB executive chairman Beroz Nikmal Mirdin said the agreement marked a pivotal milestone in JSB’s mission to deliver impactful and future-ready renewable energy solutions and create jobs for Sabahans. “As a proud Sabahan, I am deeply honoured to lead this landmark initiative – one that not only strengthens Sabah’s energy resilience but also contributes meaningfully to the state’s renewable energy roadmap and Malaysia’s broader decarbonisation goals,” he said.
JV with Turbine Manufacturer
Beroz said JSB is exploring a joint venture with a world-class turbine manufacturer to establish a manufacturing facility in Sabah, adding that localising production and building technology capabilities locally would elevate Sabah’s role in the regional energy value chain.
Engineering, Procurement, Construction, and Commissioning Contract
JSB also announced that the engineering, procurement, construction, and commissioning contract for the project had been awarded to a consortium led by XD Power Transmission Sdn Bhd, a subsidiary of Xi’an Electric Engineering Co Ltd, together with PT Anhe Konstruksi Indonesia and Jawat Johan Sdn Bhd.
Award of Contract
The award followed a comprehensive international open tender process launched on May 10, 2023. A total of eight firms purchased the tender documents, with four bids ultimately submitted and evaluated.
Conclusion
The signing of the PPA marks a significant milestone in JSB’s pursuit of sustainable energy solutions and its commitment to creating jobs and stimulating economic growth in Sabah.
FAQs
Q: What is the capacity of the hydropower project?
A: The project has a capacity of 162MW.
Q: How long is the concession period?
A: The concession period is 40 years.
Q: What is the expected revenue for JSB?
A: The project is expected to generate approximately RM300 million in annual recurring revenue for JSB.
Q: How many job opportunities will the project create?
A: The project is expected to create approximately 2,000 job opportunities during the construction period, with an additional 150 high-skilled job opportunities for the maintenance and operation of the plant post-construction.