Up to 17 small hydropower schemes in Sabah
KGAL has been appointed to project manage the feasibility and development of a series of small hydropower schemes in the Malaysian state of Sabah, a programme which is expected to last around nine years. It is also allowing the company to play an important part in improving both environmental and socio-economic standards and helping the State of Sabah Government (SSG) to meet their target to achieve “developed” status by 2020.
SSG is focusing on “nation-building”, whilst protecting the people and their environment. Amongst SSG’s most pressing concerns is national energy security and how to ensure continuous supply of energy at affordable prices. In 2004 Malaysia signed up to the Kyoto Protocol and, in 2011, established the Sustainable Energy Development Authority of Malaysia (SEDA Malaysia), adopting a sophisticated system of Feed-in Tariffs and other incentives to help develop its renewable energy resources.
Sabah’s shortfall in generation capacity results in frequent blackouts, but it has huge hydro potential. The client, Warisan Harta Sabah Sdn. Bhd. (WHSSB), the investment arm of the SSG, is committed to drive Sabah’s economic growth in strategic industry sectors including power generation, and to act as a vehicle for wealth distribution to the general population of Sabah.
Working with SSG’s Economic Planning Unit and developer Nova Beta Energy (NBE), WHSSB has identified a number of run-of-river hydropower opportunities (all under 30MW) and feasibility studies are to be carried out on 17 sites with an estimated combined installed capacity of 432MW.
The benefits of developing this project are numerous. It will not only provide a reliable electricity supply to a region with an existing shortfall, but it will also increase local jobs and tourism in the area, improve the region’s infrastructure (transport, water, power) as well as education, health, agriculture, forestry and fisheries not to mention fuelling the local economy by providing an income from exporting the power.
The proposal will adopt the compliance standards of the International Hydropower Association’s (IHA) Sustainability Protocol and all development will follow the principles that the IHA has established as best practice. Consultations with local stakeholders are planned to discuss issues, address concerns and assess expectations in terms of infrastructure, environmental sensitivities and the social impact on local heritage and indigenous communities.
Environmentally sensitive development of these sites will cost around £540m (RM2.9bn). Funding will come from bonds complaint with Islamic finance principles and the bank has indicated that the funds are available.
NBE’s Chief Executive Officer, Enis Arnaut, has appointed us to manage the project and help to develop this opportunity, after investing a considerable amount of time carrying out due diligence, with senior representatives of both NBESB and WHSSB visiting the UK to view our work and meet some of our existing clients.
Executive Director of Nova Beta Energy Sdn Bhd, Enis Arnaut, acknowledged the importance of the project, said “Nova Beta Energy will be dedicated to finding and delivering beneficial opportunities for the people of Sabah wherever we can find them. We have worked hard to find partners who share our outlook for this programme and believe that we have done so with KGAL. We are now looking forward to engaging with the various stakeholders to find the best outcomes for everybody.”
The image shows the signing formality at Warrisan Harta's offices (L to R): KGAL MD Ken Grubb, Warrisan Harta CEO Batuk Abu Baker Abas and NBE CEO Enis Arnaut.