The Tawau geothermal project by Tawau Green Energy has been awarded a government grant of $11.5 million by the government of Malaysia.
In a release, “Continental Energy Corporation announced that the Government Of Malaysia, acting through its Public Private Partnership Unit of the Prime Minister’s Department, has awarded a grant of 35 Million Malaysian Ringgit (approximately US$ 11.5 Million) to Tawau Green Energy Sdn. Bhd. (“TGE”). The Company owns a 10% stake in TGE.
TGE is developing a geothermal energy resource at a site named Apas Kiri, located in the southern portion of the Malaysian State of Sabah near the city of Tawau. Apas Kiri will be Malaysia’s first geothermal energy development. It is expected to come online by early 2015 with a rated net capacity of 30 Megawatts.
The grant was formalized in a Facilitation Funds Agreement (“FFA”) signed at a ceremony in Kota Kinabalu, Malaysia, on Friday, May 25th. The FFA was signed on behalf of the Malaysian Government by Dato’ Seri Dr. Ali Hamsa, Director General of the Public Private Partnership Unit of the Prime Minister’s Department; on behalf of TGE by its Managing Director, Mr. Ramzi Raad; and on behalf of Bank Pembangunan Malaysia Berhad (“BPMB”) by Mr. Zakaria Saad, its Head of Business Banking.
Under the FFA, the grant funding will be disbursed by BPMB, a development bank owned by the Malaysian Government and mandated to provide medium to long term financing to capital intensive development and infrastructure projects. The proceeds of the grant are to be exclusively utilized by TGE to pay for costs associated with constructing access roads and making related infrastructure improvements involving the Apas Kiri geothermal power development.
The Company’s CEO, Richard L. McAdoo, who is also the Geotechnical Director of TGE, was present and witnessed the signing. He said afterwards, “This grant reaffirms the strong commitment and firm resolve that both the Government of Malaysia and the Government of Sabah have in solving electrical power generation capacity shortfalls in Sabah utilizing renewable energy sources. This kind of fiscal incentive is essential to any green field renewable energy project’s success. Our recognition of this vital Government support was one of the principle factors in our recent decision to invest in TGE. The management of TGE has done an excellent job in highlighting the benefits of the Apas Kiri geothermal energy development to the people of Sabah and this grant is a remarkable demonstration of the Government’s strong commitment of support for the timely implementation of the project.”
Source: Company release via Marketwatch