Saturday, September 24, 2011

Cypark, LG in solar farm deal

SEREMBAN: Cypark Resources Bhd, the country's largest publicly traded renewable energy company, has signed a memorandum of understanding with South Korea's LG Electronics to help develop a solar farm in Pajam, Negri Sembilan.

Under the deal, the South Korean company will become Cypark's technology partner and EPC (engineering, procurement and construction) contractor for the RM94 million solar project.

Cypark had on Thursday, after the market close, sought a one-day trading suspension, presumably to announce the deal.

Yesterday, the company signed a financing agreement with HSBC Amanah Malaysia to finance the Pajam plant.

It also announced that the company had received a letter from the state government, granting rights for a 21-year lease of the land.

Chief executive officer Daud Ahmad explained that the bulk of the capital expenditure for the project is via debt.

Cypark has secured RM75 million financing loan from HSBC Amanah for the project, while the balance RM19 million will come from internally generated funds.

The solar park will be developed in three stages on a 12.15ha land and will consist of two plants, which will eventually be connected to the power grid.

The first phase, a 160 kilowatt solar project, was launched in March by Prime Minister Datuk Seri Najib Razak

The second phase, an eight megawatt (MW) solar energy plant, will start operating in December, while the third phase for a 2MW biogas energy will be operational by March 2012.

"Currently, we are connecting in progress ... It is very important that we do the first phase because the first phase will set whether the remaining of the other phases is viable," Daud said.

He also said renewable energy will become a major contributor to Cypark's revenue.

He expects the energy business to generate some RM20 million a year for the company.

"Our main focus will be on the landfills in Negri Sembilan before moving into land in states such as Perlis and Terengganu," he said

Read more: Cypark, LG in solar farm deal

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