Green & Smart pleased with recent progress
Malaysian palm oil-focussed renewable energy company Green & Smart Holdings issued an update on the progress it has made on various projects and regarding its financing arrangements on Wednesday.
The AIM-traded firm said its associated company Megagreen Energy had already completed five biogas plants under engineering, procurement, construction and commissioning contracts, with 6MW of total capacity.
With Concord Green Energy, another associated company of Green & Smart, the company said it had an existing EPCC pipeline of at least another 10 biogas plants, with contracts for 12.5MW of capacity.
Completion of further EPCC contracts was expected in the second half.
“We are pleased with our progress in developing our pipeline of wholly-owned and associated projects,” said chief executive Saravanan Rasaratnam.
“We anticipate the completion of more EPCC contracts by year-end and our existing fully-owned biogas power plants will continue to provide power to the grid while we advance the construction of the new ones.”
Green & Smart said it was continuing to progress its business model of combining build, own and operate with that of EPCC, adding that it recently completed the commissioning and interconnection works for its second fully-owned biogas power plant, the 2.0MW Malpom plant located in Nibong Tebal, Penang.
The company said it was awaiting receipt of a certificate of initial operation date, and expected to receive the formal certificate of commercial operation date during the third quarter, at which point Green & Smart would begin to sell power to TNB at the full tariff rate.
Green & Smart said it also established a pipeline of projects that it would build, own and operate, with work scheduled to commence “shortly” on the Dupont 1.0MW and Veetar 2.0MW plants.
The company additionally commenced work under its EPCC contract with CGE on four greenfield biogas-based power generation plants to be constructed within the sites of four specified palm oil mills owned by Felda Palm Industries.
It said it expected to complete the CGE plants by year-end, with the process of applying for IOD and COD on those plants to follow.
The company reportedly remained “in discussions” with CGE in relation to its pipeline of brownfield sites, and would provide further updates on those as and when appropriate.
“Green & Smart remains one of the few fully-integrated providers and operators of biogas plants in Malaysia at a time when government regulation requires all palm oil mill operators to install biogas plants to capture greenhouse gases in the form of methane that would otherwise be released into the atmosphere,” Rasaratnam said.
“As a result, the board continues to look to the future with confidence.”
Green & Smart’s board said it has a “significant market share” of contracts awarded to biogas-to-power companies in Malaysia.
As the board stated in its half yearly results for the six months to 31 March, the maintenance of this leading position was “very much dependent” on the availability of adequate funding.
As the firm continued to pursue projects and opportunities which the directors said they believed would deliver value for shareholders and enable the company to maintain its market position, the board continued to focus on securing long-term financing facilities from local finance providers who were apparently becoming “increasingly familiar” with both Green & Smart and the generation of biogas from POME to generate electricity.
In line with the company's objective to deliver value for its shareholders, Green & Smart said it was focusing on EPCC margins and project returns in order to facilitate a maiden dividend to investors for the financial year ending 30 September 2018, in conjunction with the implementation of a progressive dividend policy.