KUALA LUMPUR (Aug 10): Ranhill Utilities Bhd has obtained a four-year extension of a power purchase agreement (PPA) to develop a 50 MW large scale solar plant under large scale solar phase 4@MEnTARI (LSS4@MEnTARI) in Perak.

In a bourse filing, the water supply company via its wholly-owned unit Ranhill Solar I Sdn Bhd (RSI) said it had received a notification letter from the Energy Commission (EC) on the four-year extension agreement.

This confirms an article by The Edge on August 2, which reported that LSS4 project owners would have their power purchase agreements (PPAs) extended by four years to 25 years from 21 previously, citing sources.

The four-year extension for LSS4 winning bidders appears to be a concession the EC is making in consideration of how the viability of certain projects have been affected, following a 30%-50% jump in solar panel prices from when they submitted their bids in 2020, according to the report.

In the filing, Ranhill said its unit also received an extension of the project's financial closing date from June 30, 2022 to Sept 30, 2022 while the scheduled commercial operation date was extended to Dec 31, 2023.

“The revised terms for the PPA will govern the obligations of RSI and Tenaga Nasional Berhad (TNB) to sell and purchase the energy generated by the Facility to TNB for a period of 25 years from the commercial operation date. With the new effective period announced, the Facility will be operated and maintained up until 2048.

“The new effective period of the PPA will be stipulated under the Supplementary Agreement of PPA which will be signed between RSI and TNB,” it said.

Ranhill added that the signing of the supplementary of PPA is expected to contribute positively to the future earnings of the group.

Ranhill shares ended the day a sen or 2.56% lower at 38 sen on Wednesday (Aug 10), giving the group a market value of RM492.45 million.