Gediminas Jasionis

Malaysia's 1.5 Billion Dollar "Corridor of Renewable Energy"

by Gediminas Jasionis Feb 12, 2008
malaysia_2.jpgYesterday, February 11, the chief minister of the Malaysian state Sarawak, Tan Sri Abdul Taib Mahmud, unveiled the plan to create the Sarawak Corridor of Renewable Energy, "SCORE." He said that through this corridor the state seeks to become the major supplier of energy for all of Malaysia. Malaysia has allocated $1.5 billion for the development of renewable energy under SCORE.

The city of Bintulu has been chosen for the launch of SCORE. In the space of a generation, Bintulu transformed from a 5,000 person fishing village into a city of over 150,000 inhabitants. Now it may be poised for further growth.

"So far, the central region's potential had not been developed due, among others, to its scarce population. With development coming in now, there will be huge economic and social impact," said Prime Minister Abdullah Ahmad Badawi. He said that he has ordered the development to be done in such as way as to be environmentally responsible. "This is to ensure that our energy resources will be developed in a sustainable and environmentally sound manner," Badawi said.

SCORE will make up 57 percent of Sarawak's land mass, a total of 70,700 square kilometers.

Following yesterday's launch of SCORE, Sarawak Energy Bhd signed several letters of intent (more precisely, memoranda of understanding) with companies for the implementation of power-related projects for SCORE.
An agreement with Press Metal Bhd was made to implement the 8x300MW Bakun Hydroelectric project, as well as a project to connect the Bakun dam to the Malaysian peninsula via two underwater cables. Among the other companies selected were Sime Darby Bhd, Tenaga Nasional Bhd, Cahya Mata Sarawak Bhd, and Rio Tinto Aluminium Ltd.

Cahya Mata Sarawak Bhd also signed such a memorandum with Rio Tinto Aluminium Ltd to provide aluminum smelting technology services for Salco, which is a joint smelter venture between the two companies. The companies estimate that up to RM2.4 billion (741 million U.S. dollars) will be added to Malaysia's gross domestic product from this smelter project alone.

Cahya Mata managing director, Datuk Richard Curtis, commented: "We laud the steps taken by the Sarawak state and the Federal Governments to establish the new poverty eradication and industrial development corridor, a project that is clearly in line with transforming Sarawak into a developed state by 2020 with other plans of the Ninth Malaysia Plan.
We are confident that the Salco smelter project will boost Sarawak's economic prosperity even further."

Since from before the announcement on Monday until today, Tuesday, at closing, a sampling of related stocks reacted to the news as follows:

  • Sarawak Energy Bhd (2356.KL) is up 4.5% to close at 2.30.
  • Press Metal Bhd (8869.KL) is up 0.7% to close at 1.40.
  • Sime Darby Bhd (4197.KL) is unchanged at 11.90.
  • Tenaga Nasional Bhd (5347.KL) is down 1% to close at 9.20.
  • Cahya Mata Sarawak Bhd (2852.KL) is up 4% to close at 2.25.
During the same period, the Kuala Lumpur Composite Index (KLCI) was up about 1.6%.

More news here on on this breaking story as it develops.

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