KUALA LUMPUR (July 13): Kinergy Advancement Bhd’s (KAB) unit has signed a heads of agreement with a China-based entity to start its first biomass plant, focusing on power and steam generation.

This plant is expected to be set up on a plot of 300 acres (121.41 hectares) in Kulim, Kedah.

In a statement on Thursday (July 13), the company, which was formerly known as Kejuruteraan Asastera Bhd, said its wholly owned subsidiary KAB Energy Holdings Sdn Bhd (KABEH) signed the agreement with XSD International Paper Sdn Bhd (XSDIP) to develop and operate a biomass-fuelled steam turbine cogeneration plant.

For starters, the signing allows for the commencement of the development on approximately 5.06 acres of land.

“XSDIP's expressed interest in procuring thermal energy in the form of steam generated by KABEH represents a significant opportunity to enhance our recurrent income base. This collaboration has the potential to bolster our financial sustainability and contribute to long-term growth,” said executive deputy chairman Datuk Lai Keng Onn.

This plant is expected to generate up to 30MW of electricity and 80 tonnes of steam per hour.

"The primary objective of this project is to revolutionise our energy generation by harnessing the power of biomass or agricultural waste as a sustainable and environmentally friendly alternative energy source,” Lai said.

He added that electricity produced from the plant also reduces waste, and promotes efficient and responsible utilisation of biomass resources.

“We aim to not only generate electricity through utilising biomass fuel derived from empty fruit bunches and woodchips, but also through burning gas to generate steam, contributing to a more greenhouse gas-neutral approach."

He further said this partnership is also aligned with the group’s overarching strategy of expanding recurrent income, innovative development, and sustainable energy initiatives.

KAB shares were up half a sen or 1.54% to 33 sen each, valuing the group at RM596.64 million.