KUALA LUMPUR: Cepatwawasan Group Bhd expects return on investment (ROI) of about 15% on average for its two bio-energy projects costing RM80mil that would use palm waste to generate electricity.
Executive chairman Datuk Mah King Thian said he expected the 3MW biogas plant and 10MW biomass fired plant, which would be built in Sandakan, to contribute about RM20mil annually to group revenue by 2011.
He told StarBiz that construction on the plants would be tendered out and work was expected to start by mid-2009 and commissioned by 2010. Financing would be from the company’s own funds and project financing.
“The projects have been endorsed by the Energy, Water and Communications Ministry under the small renewable energy programme to supply green power to the electricity grid,” he said.
Under the agreement signed last Friday, Cepatwawasan would sell power to the Sabah Electricity Sdn Bhd (SESB) and generate carbon credits derived from reduction of green house gas emissions worth more than RM20mil per annum.
Denmark’s Climate and Energy Ministry and Nordysk Elhandel A/S will undertake the clean development mechanism (CDM) projects with Cepatwawasan. The Danish government would then buy the carbon credits.
“Construction cost of the plant was RM60mil for the biomass plant and RM20mil for the biogass plant,” Mah said.
He added that Cepatwawasan was expected to sign a renewable energy power purchase agreement with SESB early next year.
Mah said the projects would utilise all waste products from the palm oil milling process to generate electricity.
Asked if the company was affected by the declining crude palm oil (CPO) prices, Mah remained optimistic about its business.
“We will be affected,” he said, but based on the first six months of this year, Cepatwawasan’s operating cost was below RM1,200 per tonne.
“So even at the current low, we are still confident that we are profitable. We have a low gearing of 0.1 times,” he said.
On the sharp fall in CPO prices, he said the panic reaction was not linked to global demand,” he said. CPO third-month futures closed at RM1,390 per tonne last Friday.
Royal Danish Ambassador Svend Waever exchanging documents with Cepatwawasan MD Datuk Mah King Seng. Looking on are Royal Danish Embassy counsellor Bo Monsted (extreme left) and Cepatwawasan Berhad executive chairman Datuk Mah King Thian (extreme right) after the signing ceremony for Clean Development Mechanism ( CDM ) project at Le Meriden Hotel, Kuala Lumpur. - Starpix by Victor K.K. Ng
another news from bernama
October 24, 2008 18:25 PM
Cepatwawasan Expects RM20 Million Annual Revenue By 2011 From Bio-Energy Business
KUALA LUMPUR, Oct 24 (Bernama) -- Main-board listed oil palm plantation company, Cepatwawasan Group Bhd, expects its bio-energy generation business to contribute about RM20 million in revenue annually by 2011.
The projection is based on the sale of electricity to Sabah Electricity Sdn Bhd (SESB) and also the carbon credits derived from certified emission reduction, its executive chairman Datuk Mah King Thian said on Friday
He said Cepatwawasan is expected to sign a renewable energy purchase agreement (Repa) with SESB early next year.
Mah was speaking after the signing of agreement for Clean Development Mechanism (CDM) projects between the Danish Ministry of Climate and Energy and Mistral Engineering Sdn Bhd, a subsidiary of Cepatwawasan. An agreement was also signed between Nordjysk Elhandel A/S and Mistral Engineering and Cash Horse (M) Sdn Bhd.
The ceremony was officiated by the new Danish Ambassador to Malaysia, Svend Waever.
Cash Horse is also a subsidiary of Cepatwawasan, while Nordjysk Elhandel is a Danish private limited company involved in trading and generation of power.
Cepatwawasan's two green bio-energy projects at the Prolific Yield Palm Oil Mill in Sandakan, Sabah, will utilise all waste products from the palm oil milling process and turn it into electricity.
The projects have been endorsed by the Energy, Water and Communications Ministry under the Small Renewable Energy Programme (SREP) to supply green power to the electricity grid.
The projects -- Biogas Energy Plant, at RM20 million cost, will be generating about three megawatt of power for supply to the grid of SESB, while the Biomass Energy Plant to cost RM60 million, will be able to export 10 megawatt of power to the grid of SESB.
"The total cost of RM80 million will come from internally generated funds and from project financing mainly using the Repa. The construction is expected to commence mid next year and we expect it to be completed by 2010," said Mah.
Cepatwawasan's two bio-energy projects are expected to be registered for the CDM, which is part of the United Nations Framework Convention for Climate Change and the Kyoto Protocol.
CDM allows emission reducing projects to generate carbon credits and trade these with countries, which have binding targets for emission reductions under the Kyoto Protocol.
On another development, Mah said the group is setting up a Cepatwawasan Education Resource Center (CERC) at Sukau, Kinabatangan, Sabah as part of its corporate social responsibility programmes.
Mah said CERC is to provide high-level pre-school to primary education for children around Segaliud, Sukau and will benefit around 100 children from four to 12-years old.
"The total cost is estimated at about RM1 million and it will occupy an area of less than two acres. Construction is to commence next two weeks and to be completed by May 2009," he said.
Asked on the declining crude palm oil price, Mah said: "In the first six months of this year, we have analysed our operating cost at below RM1,200 per metric tonne of oil. So even at current low, we are confident that we are still profitable and also we have a low gearing at about 0.1 times."
Meanwhile, Waever said through the CDM, Denmark will assist Danish companies to enter the Malaysian market as there is a vast potential for CDM projects in Malaysia.
On the impact of the global financial crisis on trade between Denmark and Malaysia, he said the Danish Embassy expected bilateral trade to increase with Malaysia as the country was not expected to be very much affected by the crisis.
He said Danish exports to Malaysia increased by almost 20 percent year-on-year from 2006-2007 within various sectors particularly in the areas of pharmaceuticals and food.
-- BERNAMA
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