Renewable energy projects are rising in
Malaysia and this phenomenon has attracted global foreign funds who are looking
for growth in Malaysia by investing in solar-based companies.
It was reported that the demand for power
in Peninsular Malaysia is projected to increase to 30 gigawatts (GW) generation
capacity by 2030 from peak demand capacity of 15 GW in 2008.
"Malaysia has huge potential
renewable energy resources in the form of biomass, solar and hydro. These
global funds who invest mainly in renewable energy projects are eyeing
investment potentials in key markets in Asia and targeting companies which are
undervalued and have the potential to grow.
"In Malaysia, we understand there is
a global fund looking at several companies involved in renewable energy
projects that are listed in the local stock exchange. This includes companies
which are bidding for projects under the Large Scale Solar (LSS) scheme here
like Vsolar Group Bhd," said a local fund manager with knowledge on the
matter.
Malaysia recently opened competitive bidding
for one GW of solar plants worth about RM4 billion, the largest capacity
offered under the LSS scheme.
The Ministry of Energy and Natural
Resources is requesting proposals through a competitive bidding process for the
development of the fourth cycle of LSS (LSS4) projects.
In a statement, the Ministry said the
overall capacity for LSS4 will be split into several packages of 10-30 megawatt
(MW), 30-50 MW and up to 500 MW.
Vsolar has formed a partnership with
Mattan Engineering Sdn Bhd to bid for a 50 WM project under the LSS scheme.
The company told the stock exchange on
June 16, 2020 that through its wholly-owned subsidiary, Cubetech Asia Sdn Bhd,
it plans to bid and secure a quota under the LSS scheme, with Mattan as the
engineering, procurement, construction and commissioning partner for the
project.
The stock has been trading actively in
the past few weeks since the LSS4 project was announced, and also perhaps on
news that global renewable energy funds are looking at Malaysian companies for
expansion.
Vsolar closed 1.5 sen higher today at 7
sen. Some 380.8 million shares exchanged hands. Volume-wise, it was the second
most active stock traded on Bursa Malaysia.
A source said that Vsolar will perform
better both revenue and earnings-wise, should it win the LSS project.
With more projects rising, the company is also expected to submit new bids.
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