KAB to Launch Indonesia’s First Greenfield Biogas Project, Enhancing Renewable Energy Expertise

Kinergy Advancement Berhad, formerly known as Kejuruteraan Asastera Berhad and recognized as an APAC 2024 Top 10 Energy Sustainability Solutions Provider, has revealed through its wholly-owned subsidiary, KAB Energy Holdings Sdn Bhd (“KABEH”), a term sheet agreement to acquire the entire equity interest in PT Green Energy Specialist One. This acquisition includes the development of a 4.26MW biogas plant in Aceh, Indonesia.

The proposed acquisition not only includes purchaser exclusivity over the 6.5-hectare land designated for the biogas plant but also demonstrates KAB’s enhanced capabilities in developing, constructing, maintaining, and owning diverse energy projects. This move significantly strengthens KAB’s leadership in the sustainable energy sector.

PT GESO has secured a 25-year Power Purchase Agreement (PPA) with PT Perusahaan Listrik Negara (PLN), Indonesia’s state electricity company, ensuring a reliable and steady revenue stream for KAB, thereby bolstering its recurring income on the regional stage.

Additionally, the acquisition includes an exclusive agreement with four palm oil millers for the sale and purchase of palm oil mill effluent. This agreement guarantees a consistent supply of raw materials essential for biogas production, enhancing the operational efficiency and reliability of the plant.

KABEH has agreed to complete this strategic acquisition for approximately RM8.89 million. The biogas plant, a premier greenfield facility with a capacity of 4.26MW, will diversify KAB’s energy portfolio and reaffirm its commitment to sustainable energy generation and environmental stewardship.

Dato’ Lai Keng Onn, Executive Deputy Chairman and Group Managing Director of KAB, stated, “The acquisition of the Aceh biogas plant aligns perfectly with our growth plan in sustainable energy. Indonesia, being the world’s largest producer of palm oil, provides an abundant feedstock for biogas production, making it an ideal location for this development. This project not only enhances our renewable energy portfolio but also positions us as a leading energy solutions provider, ready to leverage regional growth opportunities. Upon completion, the Aceh biogas plant will generate recurring revenue for KAB, solidifying our presence in the Southeast Asian market and supporting our mission of driving sustainable energy development.”

KAB, recognized as an APAC 2024 Top 10 Energy Sustainability Solutions Provider, is rapidly expanding its footprint in the sustainable energy sector. The acquisition of PT GESO underscores the Group’s commitment to strengthening its market presence as a distinctive energy player and advancing in the fast-growing Southeast Asian energy market.