KAB acquires entire stake in Future Biomass Gasification
The agreement follows from an earlier signing of the term sheet on the proposed acquisition, which was announced on 9 November 2022, and the completion of due diligence processes.
KAB stated that FBG owns a biogas plant in Kuala Ketil, Kedah in Malaysia, which has an installed capacity of 2.4 megawatts. The plant captures greenhouse gases emitted from palm oil effluents, and converts the gas into electricity via biogas engine generators.
This electricity is supplied to the national grid, and so to local towns and villages under a feed-in tariff programme.
With this acquisition, KAB said that it will recognise revenue from FBG’s existing renewable energy power purchase agreement (Reppa) with Tenaga Nasional Bhd.
The Reppa commenced in 2018 and is effective for 16 years until 2034.
“Upon completion of acquisition, KAB’s Sustainable Energy Solutions (SES) segment will own its first biogas power plant. KAB’s SES portfolio currently has solar photovoltaic systems, cogeneration, and waste-heat-recovery assets in Malaysia and Thailand,” added KAB.
This acquisition is targeted for completion in the second quarter of 2023, and will be funded by a combination of bank borrowings and internally generated funds.