Gamuda Berhad To Acquire 30% Stake In ERS Energy For RM200 Million


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Gamuda Berhad executed a subscription and shareholders agreement to acquire a 30% equity interest in ERS Energy Sdn Bhd via subscription of 4,285,714 new ordinary shares for a total cash consideration of RM200 million only.


Upon completion of the Proposed ERS Energy Investment, ERS Energy will become a 30%-owned associate company of Gamuda.


ERS Energy, established in Malaysia on 28 August 2009, is a leading solar energy Engineering Procurement Construction and Commissioning company and one of the early entrants to the solar scene in Malaysia.

ERS Energy’s main business scope is solar photovoltaics EPCC and system integrations with capability from small to large-scale deployment, including residential, commercial and industrial, and utility-scale projects. ERS Energy is now one of the largest solar EPCC players in Malaysia and the region, with a total project experience of close to 700MW of completed large-scale solar projects.

Along with solar PV EPCC projects, ERS Energy also operates business units focusing on electric vehicle charging solutions, operation and maintenance of solar PV systems, solar PV energy storage solutions, and trading and wholesaling of solar PV equipment.

ERS Energy is currently a joint venture partner of Gamuda in NEDA Pekan Sdn Bhd to develop a 39MW (29.99 MWac) solar power plant under the New Enhanced Dispatch Arrangement framework. NEDA framework allows power producers such as renewable energy producers to supply energy to a Single Buyer, Tenaga Nasional Berhad (TNB) without entering into a power purchase agreement (PPA). NEDA framework is expected to enhance the competition in the local power generation industry by introducing a system whereby power producers bid daily on variable operating rates.

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RM200 million, payable in cash, in exchange for 30% of equity interest, equivalent to 4,285,714 new ordinary shares in ERS Energy.

The first tranche of the Subscription Shares shall be RM80 million. A balance of RM120 million shall be subscribed based on ERS Energy’s funding requirement and to be mutually agreed upon between the parties.

The proposed ERS Energy Investment will enable Gamuda group to fast-track its renewable energy business plan and serves as a springboard for the group in pursuing much wider energy-related opportunities presented by the trajectory of the global energy transition including energy storage, smart grids, and associated infrastructure.

The investment and partnership with ERS Energy will be integral to enabling Gamuda group to actively participate in the world’s transition to net zero, in line with Gamuda Green Plan which commits the group to reduce carbon emissions intensity by 30% in 2025 and 45% in 2030, with an ambition to grow Gamuda group’s renewable energy asset portfolio to over 800MW in next few years.

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Upon completion of the Proposed ERS Energy Investment, apart from the 30% stake in ERS Energy, Gamuda will also effectively hold 64% of shareholdings in NEDA Pekan. As the NEDA framework will form the base for the virtual PPA (VPPA), the participation in NEDA Pekan will put Gamuda and ERS Energy in a frontrunner position of the recently announced Corporate Green Power Programme (CGPP), which uses the VPPA mechanism to allow corporate consumers to purchase renewable energy virtually. Strategically, NEDA is the springboard from which VPPAs can be developed, which will then herald a new era of renewable energy generation matching to direct corporate and institutional consumption.

ERS Energy, led by a strong management team who has delivered a solid solar EPCC track record, has extensive experience in large-scale solar projects in Malaysia, Vietnam, and the Philippines. The Proposed ERS Energy Investment will pave the way for a long-term partnership between Gamuda and ERS Energy to mutually benefit the renewable energy space.

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Moving forward, ERS Energy will accelerate its growth in the solar renewable energy space, by broadening its clientele base into new geographies and complementary business verticals along the renewable energy value chain.

Gamuda will also cooperate with ERS Energy in areas of, including but not limited to, human capital and talent management, organization systems, technical and design, business development, and capital management to promote knowledge transfer to mutually strengthen renewable energy capabilities and capacities to ensure value enhancement and creation to shareholders.

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