Malaysia’s first geothermal energy project gets federal grant

May 28, 2012

Malaysia’s first geothermal power plant, to be built at Apas Kiri in Sabah’s Tawau district, is expected to have the capability of generating more than 100-MW of electricity, once all its development phases are completed.

Tawau Green Energy Sdn Bhd (TGE), the project’s developer, is building the first, which is expected to begin operation in 2014 with a generation capacity of 30-MW.

The project is being support by Mayasia’s federal government which will provide a 35 million Ringgit (USD11.1 million) in funding under public-private partnership agreement signed at the weekend. The total phase one project investment is estimate at RM419 million (USD133 million) with the preliminary infrastructure and interconnection accounting to almost RM120 million (USD38 million).

Last November TGE signed a power purchase agreement with state utility Sabah Electricity Sdn Bhd, giving at a 21-year concession to provide 30-MW of electricity to the Sabah grid at a fixed tariff of RM0.21/kWh (7 US cents). The project will also qualify to receive carbon credits under the Clean Development Mechanism of the United Nations Framework Convention on Climate Change.

Earlier this month the company entered sold 10 percent of its shares Vancouver, Canada-based Continental Energy Corporation. CEC is listed on the OTC Bulletin Board in the United States and has been actively involved in Indonesia’s oil and gas industry.

The Apas Kiri geothermal prospect had been identified by Malaysia’s Minerals and Geosciences Department as having the potential for electricity generation through studies commissioned by the department in the early 1990s and more recently, in 2008-2009. The survey covered an area of about 50-km, leading the discovery of a 12 square kilometers sub-surface heat water field.