PETALING JAYA: Ranhill Holdings Bhd’s large-scale solar (LSS4) project is on track for completion by year-end and expected to give it “relatively attractive project returns” because of low capital expenditure (capex) and a comparatively higher tariff.
Ranhill, via wholly-owned Ranhill Solar 1 Sdn Bhd (RS1), was awarded a 50 megawatt (MW) project under the LSS4 bidding cycle back in 2021. A 21-year power purchase agreement was originally signed with Tenaga Nasional Bhd
but was later extended to 25 years in line with the Energy Commission’s decision, following cost escalation across the industry during the construction period.
In a report following a visit to the LSS4 project in Bidor, Perak, MIDF Research said it came out feeling affirmed of the group’s prospects as it believes returns could be quite attractive.
“A total capex of approximately RM180mil was spent on the plant, with RM158mil of the amount going towards engineering, procurement, construction and commissioning, translating into RM3.2mil per MW.
“This is relatively lower versus comparable LSS4 plants costing north of RM3.5mil/MW.” MIDF Research said in a report.
According to the research firm, RS1’s tariff sits at the higher end of the LSS4 winning bids at 19 sen per kilowatt hour.
“We raise FY24F earnings by 7% to factor in the maiden contribution from the RS1 plant from FY24F onwards.
Any earlier than expected commercial operation date will be a slight positive for FY23 forward earnings,” MIDF said.