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| 1. |
INTRODUCTION
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The Company is pleased to announce that Tenaga Nasional Berhad ("Tenaga"), the country’s national electricity company today signed a Supplemental Power Purchase Agreement ("Supplemental PPA") with YTL Power Generation Sdn Bhd ("YTL Power"), a wholly-owned subsidiary of the Company for the purchase of 1,400 GWh of electricity per annum for the next three years ("Additional Electricity Sale").
Dato’ Dr Jamaludin bin Dato’ Mohd Jarjis, Chairman, signed on behalf of Tenaga and Tan Sri Dato’ Francis Yeoh Sock Ping, Managing Director, signed on behalf of YTL Power. |
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| 2. |
DETAILS OF THE ADDTIONAL ELECTRICITY SALE
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Additional Quantity
The additional quantity will be supplied to Tenaga from the existing YTL Power plants at Paka and Pasir Gudang and is in addition to the electricity currently being purchased by Tenaga under the terms of the Power Purchase Agreement ("PPA") signed by the two parties on 31st March 1993.
The total annual quantity of electricity that Tenaga will purchase under the Supplemental Power Purchase Agreement is 1,400 GWh. The agreement is effective for a period of three years commencing on 1st January 2001 and expiring on 31st December 2003. Under the terms of the agreement Tenaga has the flexibility to despatch electricity based on consumer demand.
Price of Additional Electricity
The additional electricity is being sold to Tenaga at a price of 10.9 sen/kWh.
Effective Date
The Supplemental PPA will, upon signing, be effective as from 1st January 2001. |
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| 3. |
FINANCIAL EFFECTS OF THE ADDITIONAL ELECTRICITY SALE
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Earnings
The Additional Electricity Sale is expected to improve the earnings of the Group for the current financial year ending 30 June 2001 and the financial years ending 30 June 2002 to 2004.
Net Tangible Asset
The Additional Electricity Sale is expected to improve the Net Tangible Asset backing of the Group for the current financial year. |
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| 4. |
CONDITIONS PRECEDENT
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The Additional Electricity Sale is not subject to any conditions precedent. |
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| 5. |
APPROVALS REQUIRED
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The Additional Electricity Sale is not subjected to any approvals from authorities. |
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| 6. |
DIRECTORS AND SUBSTANTIAL SHAREHOLDERS' INTEREST
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None of the Directors and Substantial Shareholders of the Company and persons connected to the Directors and Substantial Shareholders of the Company has any interest, direct or indirect, in the Additional Electricity Sale.
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The full text of the Tan Sri Francis Yeoh's speech: |
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Today's signing ceremony is a simple affair, as it involves only two parties who have worked together for a long time. I can well remember the signing of our first PPA in 1993. That was similarly just between Tenaga and YTL Power but with about 10 lawyers in between it could hardly be termed simple!
Simple though this ceremony may be, it is an extremely significant milestone in our relationship with TNB. The signing of the Supplemental Power Purchase Agreement for the sale of an additional 1400 GWh of electricity per annum to Tenaga for the next three years affirms the excellent working relationship established between us over the past seven years. Indeed, even before formalising the agreement we have commenced supplying additional electricity to TNB in good faith to meet system demands.
The price for the additional electricity has been agreed at 10.9 sen per kWh. I believe that you will all know that this is a very competitive price and significantly below the current price charged by all the IPPs. However, this is a price that both parties have been happy to agree. For YTL Power, it represents an opportunity to assist TNB reduce its cost of generation at a time of rising demand and for TNB, it is below its own cost of generation.
The electricity supply industry has been through major swings and changes in the past decade. From the critical power shortage and brown outs of the early nineties to the large reserve margins of the mid-nineties, we are again experiencing a period of rising demand and narrowing reserve margins. The difference this time is the ability of Tenaga and the Government to manage the process of meeting this demand as a result of the introduction of the IPPs. With a larger number of participants in the industry, additional power can be purchased from existing plants to minimise the impact to the country and Tenaga of sudden and large capital investments in new generating plant. The purchase of the 1400 GWh from YTL Power allows Tenaga to avoid a reoccurrence of the "too much too fast" experienced after the last power crisis.
I wish to thank Tenaga for their confidence in us. We are indeed grateful for this opportunity to assist Tenaga by providing the additional electricity at this competitive price. The purchase of additional electricity is a major step forward in our relationship with Tenaga. We hope, in the future, to be able to do much more together as the country moves towards a more liberalised electricity supply industry.
You have my assurance that we at YTL Power stand ready to co-operate with Tenaga and the Government to achieve a more competitive electricity supply industry for the benefit of the Malaysian consumers.
May God bless our endeavours as we work towards this common goal. |
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