Latest news with #RM6.7bil
The Star
4 days ago
- Business
- The Star
Power sector going through surge in demand
PETALING JAYA: Listed power infrastructure players are set to gain from the strong electricity demand from energy-intensive industries such as data centres, according to Hong Leong Investment Bank (HLIB) Research. In addition, the demand for power infrastructure is set to trend higher underpinned by Tenaga Nasional Bhd 's (TNB) efforts to enhance grid resiliency and expansion of national power supply. 'Policy tailwinds, such as Malaysian Investment Development Authority's cable import restrictions and TNB's preference for local contractors, create barriers to entry for foreign competitors, further reinforcing the market position of domestic players,' the research house noted in a report yesterday. Given the robust project pipeline and rising infrastructure requirements, the sector has not yet reached its cyclical peak, according to the research house. It noted that the power sector is experiencing a surge, with peak power demand reaching a record high of 21,049MW on May 28, 2025 – a robust 10.4% year-on-year (y-o-y) increase. 'This growth significantly outpaces TNB's gross domestic product-linked demand projection of 3.5% to 4.5% and surpasses the Energy Commission's 2020 long-term forecast, which projected peak demand of 19.3MW only by 2025,' HLIB Research said. The rise is driven by the combination of organic demand and load acceleration from data centres, with the latter's utilisation surging to 485MW in March 2025 – 3.2 times increase from 148MW a year earlier. 'In response, the Energy Commission has initiated tenders for new and existing gas-fired power capacity slated for commissioning over 2025 to 2029 to maintain a healthy reserve margin. 'At the same time, renewable energy (RE) deployment remains a key policy focus, with national targets set at 31% RE capacity by 2025 and 40% by 2035. 'Amid this backdrop of rising demand and a strong pipeline of new power supply, we see a compelling multi-year investment opportunity in the domestic power infrastructure space,' HLIB Research said. On TNB, the research house said investments in transmission and distribution (T&D) continued to form a significant portion of its capital expenditure (capex) to maintain grid resiliency amid rising demand. With 34% of its planned financial year 2025 (FY25) capex already utilised in the first quarter of 2025 (1Q25), TNB is expected to incur up to RM12bil capex this year for T&D-related initiatives. 'Over the Regulatory Period 4 (RP4) period), we estimate it will invest RM3bil to RM3.5bil annually from its base capex into grid infrastructure, translating into a RM6.7bil to RM7.8bil opportunity within the transmission substation business for mechanical and engineering players. 'Notably, this estimate excludes consumer-side substations, which are also required to complete connections to end users,' HLIB Research said. Looking ahead, the research house stated that TNB's RM90bil grid investment plan implied an additional RM47bil could be deployed under RP5 (2028 to 2030), exceeding RP4's RM42.8bil and pointing toward sustained momentum in power infrastructure rollout. As of 1Q25, TNB had 2.9GW of electricity supply agreement (ESA) under construction, with an additional 0.7GW signed and is set for construction commencement. 'This is higher versus the 1.3GW ESA capacity delivered in 2024 alone, signaling a strong acceleration in infrastructure pipeline, which is likely to materialise over the next 12 months. 'Following our recent engagement with TNB, the group reaffirmed that ESA enquiries remain robust, with no cancellations to date,' HLIB Research said. It is 'overweight' on the power infrastructure sector with top picks being MN Holdings Bhd with a 'buy' call and target price (TP) of RM1.88 and Southern Cable Group Bhd at 'buy' and TP: RM1.90, both of which will be key beneficiaries of grid expansion. The research house also favoured SMRT Holdings Bhd ('buy', TP: RM2.19) for its strategic involvement in the digitalisation of Malaysia's distribution substation.
The Star
07-07-2025
- Business
- The Star
Sabah's 2025 Budget will increase deficit, worsen economic gap, warns Shafie
KOTA KINABALU: Sabah's rising expenditure under the 2025 Supplementary Supply Bill will increase the state's mounting deficit and worsen the economic gap between the state government and its people, says Datuk Seri Shafie Apdal. Debating the Bill at the Sabah State Legislative Assembly on Monday (July 7), the Senallang assemblyman and opposition Parti Warisan president said that the additional RM1.2bil allocation on top of the previously approved RM6.7bil, pushes total state spending to almost RM8bil this year, yet there remained little clarity on how this would generate tangible returns for the rakyat. 'We are spending billions, but how much revenue are we actually generating? With this scale of spending, I believe Sabah is now facing a serious deficit,' said the former chief minister. Shafie also questioned the government's decision to raise RM900mil through sukuk bonds to bail out Sabah International Petroleum Sdn Bhd, likening the move to the controversial 1MDB case at the federal level. 'The state government is now in debt. A bailout of this size deserves scrutiny. It is not just about issuing sukuk, the real question is, is this money going where it is truly needed?' he asked. He stressed that every sen of public funds must lead to measurable outcomes, such as job creation, income generation, or directly solving issues affecting people's daily lives, particularly the long-standing water and electricity problems in rural areas. Shafie highlighted the frustration of many Sabahans who still struggle to access clean water, referencing some viral videos on social media of families and peaceful riots pleading for basic needs. 'They don't want luxury … they just want basic necessities like water to drink, shower, and use the toilet,' he said. He also criticised what he saw as a mismatch in spending priorities, stressing that millions were spent on state-level events and programmes that yielded little direct impact, while people were still waiting for their needs to be fulfilled. 'When we allocate extra funds, let it be based on need, not the ceremony. The people deserve more than token allocations,' he said. Shafie also raised concerns about the lack of transparency in certain allocations, including an additional RM1bil channelled to the Chief Minister's Department, describing it as odd based on his 36 years of political experience. 'We need clear answers. We request breakdowns, but often receive vague replies, such as 'for schools and students'. 'I will scrutinise and audit these expenditures, and if there is a change in government, I will ensure any abuse is addressed,' he said firmly, referring to the upcoming 17th state election, which is due by year's end. He reminded the House that these were public funds, paid by everyday Sabahans through taxes on basic goods like stationery, phones, and clothing. Touching on key issues like land rights, energy control, and foreign policy, Shafie urged better coordination between federal and state agencies to avoid repeating past mistakes like those seen in the Sipadan and Ligitan disputes. 'We need to work with our neighbours (Indonesia on developing Ambalat), yes … but not at the cost of Sabah's autonomy or resources. Let's not allow others, including PETRONAS, to dominate all our assets. 'We cannot allow this kind of spending to continue without results. The people deserve better … they deserve real development, not promises,' he said.
The Star
25-06-2025
- Business
- The Star
RM6.7bil investment boost for Penang in first quarter
79% of investments in Penang are directed to the electrical and electronics sector. — Filepic PENANG has recorded RM6.7bil in approved manufacturing investment in the first quarter of the year, Chief Minister Chow Kon Yeow says. He said the state continued to show resilience and competitiveness as a leading investment destination amid global uncertainties and persistent trade tensions. 'The RM6.7bil secured in approved manufacturing investments represented 22% of Malaysia's total. Penang is the second highest contributor among all states. 'The investments stem from 36 approved manufacturing projects and are expected to create 4,577 new job opportunities, further strengthening Penang's position as an economic powerhouse,' he said during a press conference at Komtar. Of the total investments, Chow said 90%, or RM6.1bil, came from foreign sources. This, he said, reaffirmed Penang's position as a trusted global hub for advanced manufacturing and innovation. He added that the breakdown further reflected the state's industrial strength, with 79% of the investments directed to the electrical and electronics (E&E) sector and 15% to machinery and equipment. Chow says the investments in Penang underscore continued trust from the world's leading technology players. Chow noted that the United States led foreign investments with RM2.4bil, followed by Hong Kong (RM1.3bil) and Taiwan (RM1.1bil). The Padang Kota assemblyman said he remained optimistic about Penang's medium-to-long-term investment prospects, despite the uncertainties caused by US tariffs. 'InvestPenang, the state's investment promotion agency, continues to receive strong interest from global investors, both for new investments and reinvestments in Penang. 'We are currently filtering through these investor enquiries and hope they will yield positive results once due diligence is completed. 'This sustained interest echoes Penang's strong performance in 2024, with Singapore (RM4bil), the United States (RM2.9bil) and Taiwan (RM2.1bil) ranked as Penang's top investing economies,' said Chow. This, he noted, underscored continued trust from the world's leading technology players. He said the upward momentum was the result of Penang's consistent focus on building a resilient, innovation-driven economy. 'Our strategic positioning in the global supply chain is strengthened by the alignment of forward-looking policies, industrial infrastructure and a highly skilled talent pool. 'While we continue to excel in manufacturing, Penang is now advancing into high-value domains such as integrated circuit design, advanced packaging as well as precision equipment manufacturing to support the National Semiconductor Strategy. 'At the same time, we are nurturing emerging sectors, including medical technology and global business services to ensure broader, more sustainable growth,' he said. Chow said Penang remained firmly committed to unlocking new frontiers of economic opportunity. 'Our priorities are clear – to cultivate innovation, empower our workforce and build a resilient ecosystem that welcomes high-impact, transformative investments,' he added.
