Tuesday, October 29, 2013

Mudajaya moves into renewable energy in Philippines

Mudajaya Power International (MPI), a wholly-owned subsidiary of Mudajaya, acquires a 40% stake in Amihan Energy Corporation (AEC) for Php26.4m (RM1.9m). AEC is based in the Philippines and was granted a 25-year exclusive rights by the Department of Environment (DOE) to develop wind energy resources in Cebu. The venture involves a development of up to 200MW wind energy farm on an 18.2k ha land in phases over the next 5 years with an initial development of up to 50MW.

The equipment procurement (EP) works and the O&M contract shall be awarded to a nominee corporation of MPI based on agreed terms. The balance 60% stake in AEC is held equally by Windelsey Inc and Visayan Wind Energy Holdings Corp. (BMSB)

This is positive and marks the group's maiden venture into regional renewable energy (RE) assets. This move is not a surprise as the group has been in talks for a potential wind farm project and it is within management's guidance for 2H13. Progress is still in the early stages as the venture needs to secure financial closure which is targeted by end 2014. Total development cost for the entire 200MV facility could be around RM2bn, based on the benchmark development cost of US$3.2m/MW (c.RM500m for the initial 50MW). This values Mudajaya's equity portion at c.RM245m based on a 70:30 debt-equity mix. New associate earnings from this venture should start from FY15 at the earliest.

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