TNB to buy 1MDB stake in Jimah East Power for RM46.98 million

In a statement Friday, TNB said the signing of the agreement came after it submitted the letter of acceptance to the Energy Commission's addendum to the letter of award which was issued to the utility company on June 29, 2015.

It said upon completion of the acquisition Jimah East Power will become a subsidiary of TNB, adding that the project was expected to achieve its scheduled commercial operation date for Unit No. 1 and Unit No. 2 no later than June 15, 2019 and Dec 15, 2015 respectively.

"The project will enhance TNB's generation capacity, make clear commercial sense, have a positive impact on its earnings and add long-term value for its shareholders," it said.

It said the project was expected to have a positive impact on the earnings of TNB over the life of the project and will generate returns over and above TNB's hurdle rate and thus was value creating.

The project will also increase its market share from the current 53.3 per cent to 57.7 per cent by 2020, it said.

Jimah East Power was incorporated by 1MDB and Mitsui and Co Ltd on July 5, 2013, as the special-purpose vehicle company for the development of two 1000MW coal fired power plants in Mukim Jimah.