Environmental engineering, wastewater treatment and renewable energy solutions company, BiON (AIM:BION), has made its first strides into the solar photovoltaic market, with the establishment of its new subsidiary, BiON Suria Sdn Bhd, and the conditional acquisition of solar assets.
Through BiON Suria, the company hopes to leverage the market opportunity offered by Malaysian government support for solar PV, and the country’s natural sunlight and irradiance levels, to be part of the push to increase solar PV from 194 GWh today, to 13,540 GWh by 2050.
By acquiring existing assets that have completed the Feed-in-Tariff bidding process, and secured a power purchase agreement, BiON says that all of its acquisitions will be immediately earnings accretive and support company cash flow upon completion.
The company’s first conditional acquisition is a 77% interest in the right-of-use assets of rooftop solar panels that supply 0.95MW to TNB under the government’s NEM programme. Acquired for RM6 million, the solar panels are situated on top of 54 religious buildings in the state of Perak and state of Sabah. Both have long-term power purchase agreements in place, all of which expire between the end of 2038 and end of 2040, with expected annual profit after tax of RM0.4 million per annum, from 2021.
Speaking on the news, CEO of BiON, Datuk Syed Nazim bin Syed Faisal, said: “The establishment of our BiON Suria subsidiary and acquisition of solar PV assets marks an important milestone for BiON as we enter into a new renewable energy sector for the first time – delivering on our stated strategy to diversify our portfolio.”
“We believe solar PV offers great potential for supporting our cash flow while we continue to focus on developing our biogas power plants and expanding into further waste-to-energy activities. The solar PV opportunity is demonstrated by this acquisition, which is earnings accretive and provides a secure income for the next 20 years. With the solar market in Malaysia expected to grow substantially, supported by government incentives, we look forward to expanding our portfolio in this sector.”