Kinergy Advancement Berhad (KAB) is making headlines again, this time with a major move into Indonesia’s renewable energy sector. On June 6, 2024, KAB announced its plan to acquire PT Green Energy Specialist One (PT GESO), an Indonesian company focused on biogas power generation. The acquisition, valued at RM8.89 million, is set to bolster KAB’s growing portfolio of sustainable energy projects.

What’s the Deal?

KAB’s wholly-owned subsidiary, KAB Energy Holdings Sdn. Bhd. (KABEH), is spearheading this acquisition. The deal involves purchasing 43,000 ordinary shares, which makes up 100% of PT GESO’s capital. The sellers include Green Energy Specialist Pte. Ltd. from Singapore, among others.

Why It Matters

This acquisition isn’t just another line on KAB’s balance sheet; it’s a strategic move that underscores the company’s commitment to renewable energy. PT GESO owns land where a biogas power plant will be built. They’ve already secured crucial agreements, like a Power Purchase Agreement with PT Perusahaan Listrik Negara (Indonesia’s state-owned electricity company) and supply deals with palm oil millers for the raw materials needed for biogas production.

A Step Forward for Green Energy

KAB’s foray into Indonesia’s renewable energy market started with a mini-hydro plant in North Sumatra. This new biogas project not only expands their footprint but also strengthens their Sustainable Energy Solutions (SES) portfolio. It’s a move that aligns well with the global push towards green energy and sustainable practices.

Financial Impact

For those keeping an eye on KAB’s financials, this acquisition isn’t expected to shake things up too much in the short term. It won’t affect the company’s share capital or major shareholders. However, once the biogas plant is up and running, it should start contributing positively to KAB’s earnings and provide a steady stream of recurring revenue.

The Bigger Picture

Southeast Asia is ripe for renewable energy investments. The region’s rich natural resources make it an ideal place for projects like biogas power plants. Biogas, which is produced from organic waste, offers a sustainable way to generate energy while also managing waste from industries like palm oil production. KAB’s investment in PT GESO puts them in a strong position to capitalize on this growing market.

Looking Ahead

With the acquisition expected to wrap up by early 2025, KAB is on track to further cement its role as a key player in the renewable energy sector. This move reflects the company’s broader strategy of diversifying its energy portfolio and securing long-term sustainable growth.

Stay tuned as KAB continues to lead the charge towards a greener future in Southeast Asia.