1. Introduction

HEB wishes to announce that on 15 August 2023, a consortium comprising HSS Engineering Sdn Bhd (“HSSE”), Shizen Malaysia Sdn Bhd, Solarvest Asset Management Sdn Bhd and Aziho Trading Sdn Bhd (“the Consortium”) accepted a Letter of Notification (“Notification Letter”) from the Suruhanjaya Tenaga (Energy Commission) (“ST”) informing them that ST have offered the Consortium to develop a Photovoltaic Plant (“PV Plant”) with an export capacity of 29.99MW at Lot 744 & 777, Mukim Bandar Gurun, Daerah Kuala Muda, Kedah (“the Project”). HSSE is a wholly owned subsidiary of HEB. HSSE owns 10% ordinary shares in the Consortium.

2. Information on the Project

The Project is undertaken pursuant to the Corporate Green Power Programme (“CGPP”), an initiative by the Government of Malaysia to provide opportunity for business entities to participate in the promotion and use of renewable energy in their business operation. The programme supports the growing number of electricity consumers that aspire to achieve the Environmental, Social and Governance (ESG) target.

The Project involves the proposed development, financing, construction, ownership, operation and maintenance of the PV Plant on a build, operate and transfer basis. The estimated Commercial Operation Date (COD) is December 2025.

The development of the Project requires fulfilment of the following conditions:-

(i) The execution of a virtual power purchase agreement (“PPA”) with a corporate consumer to commit to purchase the virtual solar energy under the Project for twenty (20) years; and

(ii) Approval from the ST with regards to the Consortium’s application under the New Enhanced Dispatch Arrangement (“NEDA”).

3. Financial Effects

The Project is expected to contribute positively to the revenue, earnings and net assets of HEB Group for financial years ending 31 December 2024 to 31 December 2044.

The Project will not have any impact on the share capital and/or shareholding structure of HEB.

The Project is expected to be funded via internally generated funds and/or external borrowings.

4. Risk Factors

The risk factors affecting the Project include, but are not limited to operational risks, such as unforeseen challenges related to the operation and maintenance of the PV Plant, including equipment failures, system inefficiencies, or unexpected downtimes. Nonetheless, the Board of Directors is confident in HSSE’s ability to foresee, understand, and mitigate these risks effectively, ensuring the Project's success and sustainability.

5. Approval Required

The Project, being part of the ordinary course of business of HEB Group, is not subject to the approval of shareholders of HEB or any relevant authorities.

6. Directors’ and/or major shareholders’ interests

None of the Directors and/ or Major Shareholders of HEB and persons connected to them has any interest, direct or indirect, in the Project.

7. Directors’ Statement

The Board of Directors, after considering all the relevant factors, is of the opinion that the acceptance of the Project is in the best interest of HEB Group and is a significant stepping stone for HEB group and it is in line with the Group’s overall growth strategy, embarking into the renewable energy sector.

HEB will make the appropriate announcement for immediate release to Bursa Malaysia Securities Berhad once the PPA is signed.

This announcement is dated 15 August 2023.