Mudajaya’s Indonesian power plant starts ops

by **Cals** Wed 11 Nov 2015, 22:16

Mudajaya’s Indonesian power plant starts ops

By Tan Siew Mung / theedgemarkets.com | November 11, 2015 : 3:16 PM MYT

KUALA LUMPUR (Nov 11): [size=16]Mudajaya Group Bhd ([You must be registered and logged in to see this image.] Valuation: 0.90, Fundamental: 0.35)'s 46%-owned associate PT Harmoni Energy Indonesia (PT HEI) has achieved the commercial operation date for its 2 x 7 MW coal-fired steam power plant in Desa Baruta Analalaki, Southeast Sulawesi, Indonesia, on Oct 29.

The 2 x 7 MW coal-fired steam power plant is developed on a build-operate-own concept subsequent to PT HEI entering into a power purchase agreement for a period of 25 years from the commercial operation date with PT PLN (Persero) Wilayah Sulawesi Selatan, Sulawesi Tenggara Dan Sulawesi Barat (PLN) in July 2011.

"This investment will provide a recurrent income stream to the group and is expected to contribute positively towards the earnings and net assets of the group for the current and future years," said Mudajaya in a filing with Bursa Malaysia today.

In a separate statement today, Mudajaya group managing director and chief executive officer James Wong Tet Foh said the successful commissioning and commercial operations of the coal-fired steam power plant marks a significant milestone for the group's foray into the power sector in Indonesia.

"The debut of this plant marks a game changer for the local community as this plant will augment the existing power plants that are operated using diesel engines within the Bau Bau and Buton region in Southeast Sulawesi.

"We note that it is PLN's objective in the long run to increase electricity output using more efficient coal-fired power plants for this region compared to diesel power plants, as illustrated by the Baruta Coal Power Station, which could save about 23,600 kilo litres per year of high speed diesel," Wong added.

Wong noted that with the development of a proposed special economic region within this region, coupled with the year-on-year growth in demand for power, there will be a need for additional coal-fired power plants in the near future.

"The prospects are good for expansion and the group has taken the necessary steps to develop a plant of higher capacity within the vicinity subject to approvals from the relevant authorities," he said.

As at 2.47pm today, Mudajaya shares were down one sen or 0.86% lower at RM1.15. The counter saw 273,700 shares traded, valuing it at RM624.5 million.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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