Gamuda’s investment in ERS Energy to fuel RE drive
07 Dec 2022
Gamuda Berhad has signed a subscription and shareholders’ agreement (SSA) with ERS Energy Sdn Bhd and its shareholders to subscribe for RM200mil worth of new shares in ERS Energy.
With the SSA, Gamuda will own a 30% equity interest in the homegrown solar energy service provider.
This affiliation between Gamuda – a regional leader in delivering innovative breakthrough solutions for infrastructure – and ERS Energy, a leading solar engineering, procurement, construction, and commissioning company in the Asean region, will see both parties forging a strong collaborative partnership in renewable energy (RE), leveraging on each other’s expertise and track records.
The strategic investment in and partnership with ERS Energy will also fast-track Gamuda’s RE plans, as it will enable the group to actively participate in the world’s transition to net zero and to grow its RE asset portfolio to over 800MW in the next few years. This could position the group to be Malaysia’s largest private RE producer.
It will also serve as a springboard for the group in pursuing much wider energy-related opportunities presented by the trajectory of the global energy transition, including energy storage, smart grids and associated infrastructure.
According to Gamuda deputy group managing director Mohammed Rashdan Yusof, the equity participation in ERS Energy is aligned with group’s sustainability and decarbonisation commitments outlined in its Gamuda Green Plan 2025.
“Following the launch of Gamuda Green Plan 2025 last year, we hinted at this significant foray into renewable energy. The Gamuda Green Plan 2025 commits the group to reduce our carbon emissions intensity by 30% in 2025 and 45% in 2030.
“The closure of this deal came at an opportune time, given the recent successful sale of our four highway concessions,” he says.
He adds that investing in RE and other green vertical businesses is one of the company’s strategies to build a new baseline recurring income stream for the group.
ERS Energy managing director and co-founder Jonathan Kan notes that the strategic partnership will strengthen its foothold in the regional RE markets.
“This alliance will boost greater clean energy adoption and accelerate the momentum of the sustainability agenda towards reducing carbon emissions in Malaysia and the region,” he says.
Established in 2009, ERS Energy is one of the early entrants to Malaysia’s solar scene and has more than 13 years of experience in the solar energy industry.
Since then, it has evolved into a major full-fledged solar turnkey service provider in Asean – including presence in Vietnam, the Philippines, Indonesia and Singapore – with more than 695MW solar capacity installed.
It is currently building utility-scale projects totalling 557MW, bringing the aggregate capacity to 1.2GW.
The subscriptions, which will see Gamuda surface as the single largest corporate shareholder of ERS Energy, will play an integral role in delivering Gamuda’s RE aspirations for its Penang South Islands (PSI) project.
Gamuda has committed to delivering 100% RE supply to the proposed 283-hectare Green Tech Park located within Island A of the PSI, an industrial zone designed with comprehensive green features catering for the next generation of technology players with aggressive carbon reduction commitments.
ERS Energy is developing a 39MW solar power plant under the New Enhanced Dispatch Arrangement (NEDA) framework, which will form the base of the recently announced Corporate Green Power Programme (CGPP).
A programme that allows corporate consumers to purchase RE virtually, the CGPP will be the main delivery pathway for PSI investors to meet their RE commitments.
In addition, ERS Energy’s expertise and capabilities in offering tailored renewable energy solutions will also support the group’s scope 2 emission reduction efforts.
Source: The Star
