IOI Corp eyes two more plantation estates for solar leases after Bahau deal
IOI Corp Bhd has identified at least two additional plantation estates near Tenaga Nasional Bhd grid points for potential solar leasing, following its landmark 500MW Bahau project. Group CEO Datuk Lee Yeow Chor confirmed the group is evaluating further opportunities but did not name the estates.
PETALING JAYA (Nov 6): IOI Corp Bhd has identified at least two more plantation estates near major Tenaga Nasional Bhd (TNB) grid connection points as it assesses further solar leasing opportunities following its Bahau deal.
Group managing director and CEO Datuk Lee Yeow Chor said several renewable energy developers had approached the palm oil group and that grid access would help determine which sites were suitable. He did not name the estates, reported The Edge Malaysia after the group’s annual general meeting on Wednesday (Nov 4).
IOI Corp began evaluating ageing plantation land for solar development in 2024 as a way to earn income from less productive assets. As at June 30, the group had 149,400ha (about 369,200 acres) planted with oil palm in Malaysia, with 26% in Peninsular Malaysia, according to The Edge Malaysia, citing the group’s latest annual report.
IOI Corp said on Tuesday (Nov 3) that it had signed a long-term lease covering about 1,300 acres in Bahau, Negeri Sembilan, with project developer Bahau Energy Ventures Sdn Bhd. Its wholly-owned subsidiary Luminous Aspect Sdn Bhd will hold 25% of the developer, while TNB Renewables Sdn Bhd will hold 70% and SME consortium CSP 500MW Sdn Bhd will hold 5%.
In an interview published by The Star on Oct 24 and reproduced on IOI Corp’s website, Lee said the group could start earning rent once it handed over the land, with returns from its stake to follow once the solar farm began operating. “We are not selling, we are just leasing the land,” Lee said.
At the AGM, Lee said it was too early to estimate the venture’s earnings contribution. Completion is targeted by end-2028, The Edge Malaysia reported. MBSB Research estimates IOI Corp could earn an average of RM14 million to RM16 million a year over 21 years from the financial year ending June 2029, Utusan Malaysia reported. The estimate includes land rent, IOI Corp’s share of project earnings and income from shareholder financing.
The Bahau project, IOI Corp’s first large-scale development under the Corporate Renewable Energy Supply Scheme, will pair a 500MW solar farm with a 250MW battery system capable of storing 1,000MWh. IOI Corp said the project would be backed by TNB’s power purchase arrangement with Singapore-based DayOne Data Centres Ltd, which is expected to procure up to 500MW of renewable power over 21 years for its Malaysian data centre operations. “Through the lease, we expect to generate more consistent income over the 21- to 23-year period, rather than being exposed to fluctuations in commodity prices,” Lee was quoted as saying by The Edge Malaysia.
