KUCHING: Reservoir Link Energy Bhd (RLEB) has signed an agreement to undertake the construction, commissioning and operation of a new wastewater treatment plant in Indonesia.
RLEB said PT Envirotech Akva Indonesia, a 85 per cent-owned subsidiary of Reservoir Link (Labuan) Ltd and PT Unilever Oleochemical Indonesia (PTUOI) had entered into an agreement on Thursday where PT Envirotech is accorded the concession, being the rights to undertake the construction, commissioning and operations of a dedicated plant at PTUOI facility in Sei Mangkei, North Sumatra.
The agreement is based on a “build, own, operate and maintain” (BOOM) model and its integration with the existing assets of PTUOI (Boom agreement) for an initial terms of 10 years.
On the details of the Boom agreement, RLEB said PTUOI has appointed PT Envirotech to receive and treat all wastewater that is conveyed to PTUOI’s facility (effluent inputs) and discharge all wastewater that has been treated (effluent outputs)
“Pursuant thereto, PT Envirotech intends to construct and commission a new wastewater treatment plant at PTUOI premises, which will be owned and maintained by PT Envirotech, and integrate the new plant with PTUOI’s existing wastewater treatment plant on PTUOI premises for the receipt and treatment of effluent inputs and discharge effluent outputs.
“During the term, PT Enviroech intends to operate and maintain the total system, including the existing assets and the new plant, needed for the manufacture or generation and transmission, piping or delivery of effluent inputs and treatment and discharge of effluent outputs at PTUOI premises, which must meet the relevant specifications outlined in the Boom agreement
According to RLEB, the Indonesian deal represents a proposed diversification of the company’s existing business and its subsidiaries (group) to include the provision of wastewater treatment services as well as the engineering, procurement, construction and commissioning of wastewater treatment plant and related infrastructure.
“The proposed diversification represents an opportunity for the group to venture into the wastewater treatment industry and diversify its earnings base. The Board (of directors) believes that the concession with PTUOI is an attractive business proposition which will provide the group with a long-term viable business.
“The proposed diversification will expand the group’s core business to include the wastewater treatment business and related activities, and is in line with the group’s objective to seek new business opportunities and additional sources.
“Moreover, the proposed diversification will provide an alternative source of income to the group’s current core business, thereby reducing its dependency on its existing core businesses and enhance the shareholders’ value of the company in the medium to long term,” it added.
RLEB had said earlier that based on the expected output of the new wastewater treatment plant, PT Envirotech expects to generate operating profits of about RM5.4 million per year.
To part finance the wastewater treatment plant project, RLEB has proposed a private placement of up to about 86.71 million new ordinary shares, representing not more than 30 per cent of the company’s total issued shares (excluding treasury shares) to independent third-party investors.
The proposed private placement has the potential to raise up to RM27.75 million. The expected development cost of the plant project is about RM34.35 million.
From the proceeds of the private placement, RLEB intends to use RM10 million for the plant’s development cost,RM14 million as funding to pursue renewable energy (RE) projects in Malaysia and Indonesia, and RM3.41 million for working capital requirements.
These RE projects may include the provision and implementation of hydro projects, solar PV projects for commercial and industrial property and large-scale solar PV plant to facilitate the group’s expansion in the RE industry.
