Ranhill Utilities Bhd Is Working On Its Growth Solar Projects

Ranhill Utilities Bhd is still working on its growth projects, including the Djuanda Source to-Tap project, Indonesia as well as Ranhill SAJ Sdn Bhd’s (RSAJ), solar farm.

Maybank Investment Bank Bhd noted that the company’s management continues to work on getting approvals for the projects.

“For now, the investment thesis continues to revolve around the timing and quantum of a water tariff hike in Johor, which the cabinet has approved but the state has not implemented,” the bank-backed research firm said. 

Ranhill’s consortium initiated the Djuanda Source-to-Tap project. Ranhill expects the feasibility studies to take at most three months.

“The project will be put up for tender once approved (thus, the project cost is still fluid). “Ranhill’s consortium has the right to match any winning bids due to its initiator status,” it said.

The project will take 2-3 years. RSAJ is currently in talks with regulators about building solar farms for self-consumption.

Maybank IB stated that, in addition to emission reduction, the power purchase agreement would also guarantee certainty for RSAJ’s unit electric cost.

RSAJ’s electricity consumption was 314GWh in 2021. The unit cost for a kWh is 42 sen.

“We estimate 200MW is required for complete consumption matching. Assuming a 20 sen per kWh generation cost and a 12 sen per kWh grid cost, we estimate the solar farm could reduce RSAJ’s unit electricity cost by 10 sen per kWh or RM30 million annually,” it added.