Cheapest electricity tariff in the region draws investors

http://biz.thestar.com.my/news/story.asp?file=/2011/6/2/business/8820772&sec=business

SEB has 50% firm utilisation rate (The Star)

PUTRAJAYA: Sarawak Energy Bhd (SEB), which will have the rights to the Bakun dam’s power at a rate of 6.25 sen per kwh, has a firm utilisation rate of 50% from its four customers.

The electricity from the Bakun dam which is priced at 6.25 sen/kwh with an annual hike of 1.5% under a power purchase agreement (PPA) between Sarawak Hidro Sdn Bhd and Syarikat Sesco Bhd confirmed a StarBiz report yesterday.

StarBiz quoted sources saying the rate represented the cheapest tariff in Asian history but would be escalating at 1.5% per annum for 30 years.

SEB chairman Datuk Hamed Sepawi said the four customers it had secured would utilise some 50% of capacity of the 2,400MW to be produced from Bakun hydroelectric dam.

“We are still discussing with 15 to 16 more potential Sarawak Corridor of Renewable Energy (SCORE) customers. We may need all the energy but it is not just Bakun. The Murum dam will be coming on stream in 2013 as well as a coal-fired power plant,” he said after the power purchase agreement signing between Sarawak Hidro and Syarikat Sesco witnessed by the Prime Minister Datuk Seri Najib Tun Razak and Sarawak Chief Minister Tan Sri Abdul Taib Mahmud yesterday.

Sarawak Hidro is a unit of the Ministry of Finance Inc and owner of the Bakun dam while Syarikat Sesco is the wholly-owned subsidiary of SEB.

Last month, SEB sealed separate PPA term sheets with four major investors Press Metal, OM Materials, Asia Minerals Ltd and Tokuyama Corp. The four companies which plan to invest some RM9.5bil will require a combined 1,300MW to power their upcoming plants in Samalaju Industrial Park.

SEB has also signed an MoU with Smelter Asia Sdn Bhd, which needs more than 600MW to power its proposed US$1.6bil (RM4.8bil) aluminium smelter in Samalaju.

Smelter Asia is a joint venture between Gulf International Investment Group Holdings Sdn Bhd and Aluminium Corp of China.

Earlier, Taib said the state targeted to have a total of 20,000MW power output in the next 20 years.

Hamed said SEB was happy with the PPA with the Federal Government but he did not disclose the details.

The 2,400MW Bakun dam’s first of eight turbines is expected to commercially produce its first 300MW in August to be followed by subsequent turbines at 3-month intervals until all turbines are in operation in 2013.

Hamed said the Bakun dam was built at a very competitive price compared with future hydropower projects. “At the moment the cost is US$1mil per MW, but future projects will cost US$2mil to US$3mil per MW.”

Hamed said the water levy was 1sen out of the 6.25 sen/kwh to be paid to the Sarawak government.

Sarawak Hidro is projected to earn a minimum revenue of RM36mil in 2011 and RM112mil the following year while payments to the Sarawak are expected to exceed RM7mil and RM21mil in 2011 and 2012 respectively.

The Star (Thursday June 2, 2011)

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It seems that the 6.26 sen/kWh for electricity from Bakun seems to have gone down well with investors.

In the coming months, we should expect more deals to be made between the State and the companies from all over the world keen to set up their operations in Sarawak.

Looks like SCORE is going to start getting busy soon.

Posted on June 2, 2011, in Media Reports, SCORE and tagged , , , , , , , , , , , . Bookmark the permalink. Leave a comment.

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