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Tanjung Bin Energy Achieves Commercial Operations

20 March 2016

1000MW Power Plant’s construction & commissioning completed within stipulated timeframe

Kuala Lumpur, March 21, 2016 – Malakoff Corporation Berhad’s (Malakoff) 1,000 Megawatt (MW) Tanjung Bin Energy (TBE) power plant, also commonly known as T4, enters into its commercial operations on 21st March 2016, following its successful phases of construction, testing and commissioning. TBE, which was given the Notice to Proceed (NTP) in March 2012, achieved its first synchronisation to the National Grid on its 42nd month, that is, on 15th October 2015, and to date, it has completed all the required tests necessary for safe and reliable energy generation.

“TBE is Malaysia’s first IPP project that was awarded by the Energy Commission (EC) via a competitive bidding process. During its development, we challenged ourselves to deliver an affordable electricity tariff to the off-taker, Tenaga Nasional Berhad (TNB), and ultimately to the consumers at large. Alongside the Power Purchase Agreement (PPA) signed with TNB, a Coal Supply and Transportation Agreement (CSTA) between TBE and TNB Fuel Services Sdn Bhd (TNBFS) was also sealed. TBE makes its generating capacity available to TNB under a 25-year PPA whilst the CSTA will ensure the steady and quality supply of coal to be used by the power plant,” said Habib Husin, Acting CEO of Malakoff.

“During testing and commissioning, we demonstrated our ability to be despatched day and night and this again demonstrates our commitment to reliably deliver the 1000MW capacity of electricity to the National Grid,” Habib added.

GE Steam Power Systems (GE) executed the EPC (Engineering, Procurement and Construction) contract together with its consortium partners Mudajaya Corporation Berhad (Mudajaya) and Shin Eversendai Engineering Sdn Bhd (Shin Eversendai). As the leader of the consortium, GE engineered and supplied key equipment and was responsible for the overall integration and commissioning of the plant. The plant deploys GE’s most modern steam turbine and generator technology, its ultra-supercritical boiler as well as its proprietary environmental control systems. This efficient technology solution ensures the generation of affordable electricity at lower environmental impact. Emission of nitrous oxide, sulphur oxide and dust at the plant will be significantly reduced through the use of low NOx burners, a highly efficient seawater Flue Gas Desulphurisation (FGD) facility and fabric filters.

This technology increases the plant‘s net efficiency and enables it to utilise 100% sub-bituminous coal. Andreas Lusch, CEO of GE Steam Power Systems said “TBE is another demonstration of GE's commitment to the region’s development and the need for energy mix diversification especially on coal generation. The highly efficient ultra-supercritical power plant delivered by GE Steam Power Systems will provide an additional capacity of 1000 MW for Peninsular Malaysia, providing energy equivalent to almost two million people."

During its construction, the project provided significant positive socio-economic development impact to the surrounding communities and the country as a whole. At its peak, more than 5,200 direct jobs were created. The project also created significant additional jobs related to equipment supply, manufacturing, engineering, transportation and other services.

TBE is located on 65 hectares of land adjacent to Malakoff’s existing 2,100 MW coal-fired Tanjung Bin Power Plant (TBPP). Both power plants share common infrastructure such as coal handing facilities, power evacuation, sea-water intake and other access facilities.

The operator of TBE is Malakoff Power Berhad (MPB), also a wholly-owned subsidiary of Malakoff, via an Operation and Maintenance (O&M) Agreement signed between MPB and TBE for 25 years. TBE boasts 100% utilisation of local skilled workers.

TBE’s O&M team was mobilised early in the project phase and went through rigorous training programmes to ensure their proficiency in operating this new state-of-the art ultra-supercritical technology.

TBE was project-financed via Malakoff’s wholly-owned subsidiary, Tanjung Bin Energy Issuer Berhad, with a combination of senior and junior debt facilities comprising of Islamic bonds and loans denominated in Malaysian Ringgit (RM) and US Dollars (USD), as well as internally generated funds at a debt-to-equity ratio of 80:20. The Senior debt facilities for the financing include the issuance of RM3.29 billion serially-amortising senior secured Islamic bonds (Sukuk Murabahah), a USD400 million term loan and a RM700 million term loan.

With its innovative financing structure, TBE has been recognized and awarded with at least four prestigious industry awards namely, Project Finance International’s (PFI) Asia Pacific Best Project Bond of the Year 2012, The Asset’s AAA Best Project Finance Deal, Project Finance Magazine’s (PFM) Asia-Pacific Power Deal of the Year, and Asia Money’s Best Project Financing Award, for its RM5.27 billion (US$1.65 billion) senior loan, amongst others.

The successful commissioning of TBE marks another significant milestone for Malakoff, increasing its multi-fuel portfolio net generating capacity in Peninsular Malaysia from 5,346MW to 6,346MW or from approximately 24% to 29% market share, respectively. It further reaffirms Malakoff’s position as the leading Independent Power Producer (IPP) in Malaysia.

“We would like to thank all our key stakeholders for their support in making the TBE project a success. These include the Ministry of Energy, Water and Green Technology Malaysia, the Energy Commission Malaysia, Tenaga Nasional Berhad, the State of Johor, the Malakoff TBE Project Team and GE Steam Power Systems and its consortium members – Mudajaya and Shin Eversendai,” Habib added

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