Citaglobal to set up SPV with China govt-linked unit for green energy projects in Pahang

Citaglobal to set up SPV with China govt-linked unit for green energy projects in Pahang

15 Jul 2024

Citaglobal Bhd (KL:CITAGLB) has entered into a joint development framework agreement (JDFA) with Shanghai SUS Environment Co Ltd, a China government-linked entity, to develop waste-to-energy projects in Pahang.

SUS Environment is a wholly owned subsidiary of SUS Holding Ltd, which supplies solid waste incinerators and is a developer of integrated environmental solutions.

In a filing with Bursa Malaysia on Monday, Citaglobal said the collaboration will focus on converting municipal waste into green energy and developing agricultural waste — such as empty fruit bunches (EFB) and palm oil sludge — into biomass energy.

Citaglobal said the JDFA is legally binding and will be used for the incorporation of a joint special purpose vehicle (SPV), with the company holding a 49% stake while the remaining 51% stake will be held by SUS Environment.

The SPV’s initial paid-up share capital is RM1 million, with SUS Environment contributing RM510,000 and Citaglobal contributing RM490,000, subject to the agreed business and development plan. The initial investment will be allocated for working capital.

Citaglobal added that under the JDFA, the company will be sourcing municipal waste in Pahang as well as palm oil EFB and sludge oil waste throughout the country that can be converted into electricity and resold as renewable energy.

SUS Environment, on its part, will provide the required seed investment and financing for the identified projects, for which it will oversee engineering, procurement, construction, and commissioning. It will also manage commercial operations upon completion.

“Our collaboration with SUS Environment will focus on reducing waste generation, promoting waste repurposing, and ensuring compliance with environmental regulations,” Citaglobal executive chairman and president Tan Sri Dr Mohamad Norza Zakaria said.

“This collaboration with SUS Environment is a significant step towards achieving our shared vision of promoting sustainable waste management practices in Malaysia,” he added.

In September 2023, Citaglobal and SUS Environment signed a memorandum of understanding for this collaboration during the 20th China-Asean Expo and China-Asean Business and Investment Summit.

Citaglobal shares closed four sen or 3.81% lower at RM1.01 on Monday, valuing the company at RM422.19 million.

Source: The Edge Malaysia