TNB acquiring 51% stake in SIPP Energy unit

PETALING JAYA: Tenaga Nasional Bhd (TNB) is acquiring a 51% stake in SIPP Energy Sdn Bhd’s unit Southern Power Generation Sdn Bhd (SPG) for RM51.

SIPP Energy is a private vehicle owned by the Johor Sultan. SPG was incorporated as the special purpose vehicle company for the Pasir Gudang power plant development.

Prior to the acquisition, SIPP Energy owned 100% equity in SPG. Upon completion of the acquisition, SPG will become a subsidiary of TNB.

In a filing with Bursa Malaysia yesterday, the national utility company said the power plant project is expected to be earnings accretive to the group upon its scheduled commercial operation date on July 1, 2020. It said the project acquisition will enhance the certainty of the project completion by bringing the group’s technical expertise and financial strength.

TNB also noted that the project would increase its generation market share and efficiency of its generation asset portfolio, which in turn will accelerate the group’s aspiration to become a top 10 global utility by 2025.

The acquisition has been approved by the Energy Commission and the government.