LONDON: Process equipment manufacturer KNM Group Bhd’s waste-to-energy project in UK is finally taking shape after it sets up a S$300mil (RM840mil) multi-currency bond.
In a rare meeting with the press, group CEO Lee Swee Eng said the medium-term notes that was announced last week would be used to fund its renewable energy ventures.
The company’s strategic plan was to increase its recurring income to 35% of its total income from 2018 onwards through green energy projects. They include the multi-billion ringgit 80%-owned Peterborough project in UK and 72%-owned biofuel project in Thailand.
He expects the waste-to-energy project in the UK to start engineering works next month and construction works to start in the fourth quarter. Income contribution from the project is anticipated from the third quarter of 2017 and that could make up 25% of its bottomline.
First phase of the project will produce 17.6 MW and the total capacity is 80 MW. It could take up to seven years to complete all phases.
The plant will be built on 52 acres, taking up about 30 acres. Analysts said the project was a positive catalyst for the company.
Hong Leong Investment Bank (HLIB) research said the Peterborough project could add 30 sen to the research house’s target price of 80 sen once it starts. The estimation is based on the net present value of the first phase.
But the risk for Peterborough project was its technicality, another analyst said.
“It won’t be an easy project, so the execution is crucial,” he said.
Meanwhile, another renewable energy project in Thailand was expected to contribute to KNM’s earnings in the financial year ending Dec 31, 2016.
