Continental Energy Corporation, an emerging international energy company operating in Southeast Asia, has purchased a 10% stake in Tawau Green Energy Sdn Bhd (TGE), a privately held geothermal energy developer based in Kota Kinabalu, Sabah, Malaysia.
TGE is developing the Apas Kiri geothermal resource located near the southern portion of the east coast of Sabah near the town of Tawau (see pages 34–35 of our April issue). When completed by the end of 2014, it will be Malaysia’s first geothermal power plant.
(photo credit: Tawau Green Energy Sdn Bhd)
TGE expects to generate about US$328 million in revenues over the 21 years of the power purchase agreement (PPA). The company qualifies for certified emission reduction (“CER”) credits during its first ten years of operations. Current spot CER price is 3.55 euro (US$5.50) each. When operating at its rated capacity of 30 MW, the power plant is expected to reduce CO2 emissions by 282,400 tonnes per year and earn the same number of CERs (1 CER = 1 tonne CO2 reduction). TGE is expected to earn about 750,000 euro per year at current CER spot prices.
Continental’s chief executive officer Richard McAdoo says: “The rapid and impressive track record of TGE in bringing the Apas Kiri geothermal project from concept to PPA is an excellent example of one of many attractive business opportunities available to innovative renewable and unconventional energy companies in Southeast Asia.”
The government of Malaysia has also awarded TGE a grant of US$11.5 million to finance the construction of roads and other infrastructure to the project. The money will be disbursed by Bank Pembangunan Malaysia Berhad (BPMB).