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In brief

The Minister of Natural Resources, Environment and Climate Change, had on 9 March, announced several revisions to the CGPP as follows:

  1. An additional 200MW of quota which brings to total available quota to 800MW.
  2. The extension of the application deadline to the earlier of 31 December 2023 or until the quota has been fully taken up.

The Energy Commission, as the regulator of the CGPP, had issued a revised information guide (“Guide“) on 17 April 2023 which can be downloaded from their website (www.st.gov.my).


Revisions to the Corporate Green Power Programme (CGPP)

In addition to the announcement made by the Minister, the other notable changes to the Guide include:

  1. The application period will now commence from 9 May 2023.
  2. A Corporate Consumer is only allowed to have one CGPA with a Solar Power Producer but a Solar Power Producer is no longer bound to maximum number amount of Corporate Consumers provided that they are within their export capacity.
  3. A company within a Solar Power Producer consortium is now allowed to be a member of two other consortias provided that their equity interest is not more than 30% in each of the consortium. This will probably be the biggest positive change for solar developers but it is still unclear whether a solar developer is entitled to participate in three projects with a maximum equity interest of 30% in each of the three projects or if the solar developer will be able to have an equity interest of more than 30% in one project and up to 30% in the other two project.
  4. There is no longer a requirement that the maximum demand of the Corporate Consumer to not be less than 1MW and the maximum demand shall be as declared by it to the Electricity Utility Company.

Observations

The revisions to the CGPP will no doubt be looked favourably by industry participants, especially given that parties now have more time to properly study the feasibility of a project with other relevant stakeholders. However, there are still many aspects of the CGPP which are still unclear including the renewable energy credit framework which it is hoped will be address further in time. Our previous alerts issued on the CGPP can be found herehere and here.

Source: Information Guide for Corporate Green Power Programme (For Solar PV Plant) published by Energy Commission, 17 April 2023

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This client alert was issued by Wong & Partners, a member firm of Baker McKenzie International, a global law firm with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a “partner” means a person who is a partner or equivalent in such a law firm. Similarly, reference to an “office” means an office of any such law firm. This may qualify as “Attorney Advertising” requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome.

Author

Mark Lim is the managing partner of Wong & Partners and also heads the Finance & Projects Practice Group. He has been hailed for his work in Islamic finance, debt capital markets, loans and regulatory work by established legal directories including Chambers Asia Pacific, IFLR1000 and Legal 500 Asia Pacific.
Mark has been Highly Regarded by IFLR1000 for capital markets, banking and project finance from 2011 and for energy and infrastructure since 2016. Legal 500 Asia Pacific has ranked him among their Leading Individuals for banking and finance since 2014 and inducted him into their Hall of Fame in 2021. According to Chambers Asia Pacific, clients commend him as a "highly experienced, knowledgeable and incisive lawyer" with a "strong appreciation for commercial issues and is able to provide effective legal advice on complex transactions".

Author

Faez Abdul Razak is a partner in the Kuala Lumpur Finance & Projects practice group..

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