The news on 1MDB buying Tanjong Energy Holding Sdn Bhd has attracted a lot of brickbats.
Many are quick to question why and as usual critics fail or simply refuse to look at the positive site of the ‘power’ acquisition.
Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fa Kui had recently revealed the on-going rationalizing on the IPP sector.
The minister’s strongest hint came at and after the recent National Energy Security Conference last week.
Peter Chin said at the conference that it was indeed “a timely and important platform to discuss the various energy issues that are currently being faced by the country as we are quickly moving towards becoming a country that has to rely on imports to meet our domestic energy needs”.
“Our energy security is a critical issue that has to be addressed urgently in a holistic manner to frame out a sustainable energy plan that will fulfil our developmental goals towards becoming a high income country in 2020 and beyond.
“In the longer term, we need to have an open and competitive energy sector that promotes innovation and efficiency in the industry. For this, my Ministry through MyPOWER Corporation are taking steps to restructure the electricity supply industry to enhance competition and improve efficiency.
This, together with our energy subsidy rationalisation move will result in a more robust and vibrant electricity supply industry that will bring in the needed investments to expand and strengthen our energy supply infrastructures in the future.”
1MDB in a press statement on Wednesday stated its strategic intent.
1MDB seals Tanjong Energy deal
A strategic investment for long-term energy security
KUALA LUMPUR, 7 March 2012: 1Malaysia Development Bhd (1MDB) is acquiring Tanjong Energy Holdings Sdn Bhd (“TEHSB”) as a long term strategic investment.
1MDB signed a definitive agreement last Friday on the equity purchase for RM8.5 billion. The transaction is subject to customary financing and regulatory approvals.
1MDB CEO Shahrol Halmi said: “The acquisition signals the first step towards fulfilling 1MDB’s strategic intent towards fulfilling the country’s long-term energy security.”
Shahrol said: “Energy is one of the core focus areas for 1MDB, and TEHSB is a prized acquisition. We are attracted to the strong operating track record of TEHSB, its well-diversified portfolio of quality assets, its strong in-house capabilities and the potential for new growth both here and abroad”.
“Given its unique private-public sector dynamics, 1MDB and TEHSB are in a strong position to create new synergies, establish global strategic partnerships and promote innovations in green and sustainable technologies,” Shahrol said.
1MDB aims to further enhance the capacity of TEHSB as a leading emerging market independent power producer. TEHSB is led by an experienced, Malaysia-based management team. The company maintains strong key relationships and deep understanding of local cultures and business practices in its various markets.
Shahrol said: “We have full confidence in TEHSB’s management team and its staff.”
Goldman Sachs (Malaysia) Sdn Bhd has been engaged to act as financial advisor to 1MDB for this transaction. - ends.
Note: In a nutshell, 1MDB's acquisition of Tanjung Energy Holdings Sdn.Bhd appears like a strategic move, not only to ensure national energy security but more towards creating a conducive energy supply-demand chain.
In the final analysis, customers would certainly end up being the biggest beneficiary following the Government's restructuring of the energy supply industry.
psssssst! I think the government is just reining in the IPPs. We could expect better regulations, monitoring, efficiency, accountability and mossssst importantly lower tariff in the long run. Thats the plan. He he he :-)