LONDON: BiON Plc announced the acquisition of two biogas power plants from its associate company, Megagreen Energy Sdn Bhd (MGE), which increases its installed capacity to 7.0MW.
Through its subsidiary, BiON Sdn Bhd (BSB), BiON has conditionally acquired two biogas power plants, Nasarudin and Seberang Perak (both in Perak, Malaysia), from its associate company, Megagreeen Energy Sdn Bhd, for a total consideration of MYR45.99 million.
The Acquisition is being funded via a combination of borrowing from the Small Medium Enterprise Development Bank Malaysia Berhad (SME Bank) and cash.
The cash element is being offset against receivables due from MGE. The Acquisition of two biogas power plants, with a combined installed capacity of 3.0MW, increases the Company’s installed capacity to 7.0MW.
Commercial operations at the two plants are expected to commence by year end, subject to the receipt of approvals from the relevant authorities. The plants are under the Malaysian Feed-in-Tariff (FiT) programme with 16-year power purchase agreements with Tenaga Nasional Berhad, the country’s largest integrated electricity company.
Once the biogas power plants are running at full capacity, they are expected to contribute approximately MYR9.0m (approx. £1.7m) in revenues per annum over the 16-year period.
MGE is a renewable energy provider established in 2014 and based in Sabah, Malaysia. It is an associate company of BiON through BSB, which has a 15% interest in MGE, whilst the other shareholders comprise Mega Hijau Makmur Sdn Bhd and Felcra Berhad that hold 70% and 15% interest respectively.
BSB is also the engineering, procurement, construction and commissioning contractor for MGE’s BPP projects.
In connection with the Acquisition, the Company has arranged an Islamic banking facility with the SME Bank (SME Facilities) in the total amount of MYR55.3 million.
In addition to the SME Bank financing facility, the Company has entered into an unsecured finance facility of up to MYR10 million with Serba Dinamik Sdn Bhd, a subsidiary of Serba Dinamik Holdings Berhad.