The commission shortlisted 22 solar power producers and the first announcement was awarded a total capacity of 563.42 megawatts (MW), with plant capacity ranging between 7MW and 30MW, RHB said in its research note today.
A 21-year power purchase agreement (PPA) is expected to be signed between Tenaga Nasional Bhd, selected power producers and their off-takers, with the solar plants expected to commence operations in 2024-2025.
The CGPP is a mechanism of virtual PPA, which is implemented using the existing new enhanced dispatch arrangement (Neda) framework.
It is an initiative by the government to have business entities participating in renewable energy for their business operations. It involves three parties: the solar power producer, the corporate consumer and the electricity utility company.
RHB said Solarvest, via its subsidiaries and special purpose vehicle – Atlantic Blue, Blazing Solar, and Solarvest Asset Management – has won three solar assets totalling 90MW under three different consortiums.
It noted the financial details are being finalised and the shortlisted power producers are required to apply for the Neda programme within three months. “Approvals could take three to six months. We expect significant recurring income contributions to kick in starting FY2026,” it added.
RHB also said Solarvest has the first right to refuse a total of 175MW of engineering, procurement, construction and commissioning (EPCC) jobs, or 31% of the announced 563.42MW capacity, above its assumptions of 150MW.
This was due to Solarvest having undertaken previous CGPP design and consultation for its clients.
Assuming a contract of RM3 million per MW, the total contracts could be worth up to circa RM525 million, RHB said.
It is positive on Solarvest building recurring income via solar assets and strengthening its EPCC order replenishment for the next two years.
“It is well-poised to benefit from the country’s transition towards renewable energy and should stay at the forefront of the local pure-play solar EPCC sector,” the note said.
RHB noted that lower-than-expected contract wins, unexpected changes in project costs, and lack of progress in its Taiwan and Philippines’ overseas ventures are potential risks for the group.
At 4.24pm, Solarvest’s shares were up five sen or 3.85% at RM1.35, valuing the group at RM901.5 million.