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Malaysia : PETALING JAYA: TNB inked deal with POWERTEK to extend the deadline by 46 months.

Tenaga Nasional Bhd (TNB) has been successful to expand the power purchase agreement (PPA) with Powertek Bhd for its 434MW open-cycle power plant in Telok Gong, Malacca, through December 31, 2019.

With this development, China General Nuclear Power Corp (CGN) will be able to complete its planned purchase of the power assets of 1 Malaysia Development Bhd (1MDB) power assets.

Filing a statement with the stock exchange yesterday, TNB has disclosed that it has signed the new PPA for securing a 46-month expansion to the deadline with Powertek.

TNB has revealed that the term of the first PPA has ended on January 13, 2016.

The new PPA is subject to a conditional letter of award dated August 5, 2015, that 1MDBs 100% arm Suruhanjaya Tenaga has issued to Powertek.

TNB has stated that the newly signed PPA extension deal is associated to the sale and purchase of the whole capacity and the electricity produced by Powerteks open-cycle power generation facility Telok Gong in Malacca.

In December 1, 1993, Powertek secured its 21-year Independent Power Producer concession license based on the build, own and operate model for the 434MW Telok Gong power plant.

It is notable here that 1MDB in last November has signed an agreement to sell its whole power assets that are part of the Edra Global Energy Bhd for a cash consideration of RM9.83 billion to CGN.

With the newly expanded PPA, the deal between 1MDB and CGN, accomplishment of which is anticipated in the current month, must be concluded before long.

Powertek along with its subsidiary units operates three power generation stations, with an overall capacity of 1,490 MW, in Malacca.

On Monday, TNB revealed, Three of the units in the Powertek facility is scheduled to commence operations from March 1 this year until Dec 31, 2019; while another unit is scheduled to commence operation from March 15, 2016 until Dec 31, 2019.

TNB has claimed that the new PPA arrangement is unlikely to have any impact on the national utility groups earnings over the extended term of the deal.

The shares of TNB closed at RM13.12 yesterday, down 6 sen or 0.46% over the previous closing figure, with overall trading of 102.07 million shares.

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Publication:Mena Report
Date:Mar 1, 2016
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