UPDATE – Sime Darby successor cleared to own 2,400-MW Bakun, subsea cable

Malaysian conglomerate Sime Darby announced November 21 its new venture, Synergy Drive Bhd, received Malaysian government approval to buy a 60 percent stake in both the 2,400-MW Bakun hydroelectric project and a 700-kilometer undersea transmission line to link Bakun to the mainland.

Synergy Drive is being formed from the merger of Sime Darby, whose interests range from heavy engineering to oil palm plantations, with two other plantation groups, Golden Hope Plantations Bhd and Kumpulan Guthrie Bhd. (HNN 11/20/07) Synergy Drive is expected to make its debut on the Malaysian stock market November 30, taking over the listing of Sime Darby, the biggest component of the merger.

Sime Darby informed the stock market, Bursa Malaysia, November 16 that Synergy Drive received approval from the government to buy a 60 percent stake in the Bakun project developer, Sarawak Hidro Sdn Bhd, and that it planned to begin stake acquisition talks. Sime Darby confirmed in January it had applied to acquire a stake in Sarawak Hidro, which is expected to complete the big hydro project in 2010 in Malaysia’s Sarawak State on Borneo Island. (HNN 1/23/07)

Sime Darby followed up that announcement with another November 21 that Synergy Drive received government approval to take a 60 percent stake in a firm being set up to lay the multi-billion ringgit undersea cable that would link Bakun to mainland Malaysia. (HNN 7/23/07)

The first cable will be ready for power transmission by 2013 and the second by 2015, Synergy Drive said in a separate statement. It said it would now begin detailed talks on the cost of the project as well as outline tariff proposals for state-controlled Tenaga Nasional Bhd, the country’s sole power distributor.

Malaysian newspaper the Edge quoted unidentified sources November 17 saying Sime Darby would get a majority stake in the cable consortium, with Tenaga, Sarawak Energy, and the finance ministry holding minority stakes. Malaysia said in July it was in talks with Japan’s Sumitomo Corp and Italy’s Prysmian for the supply of undersea cables.

U.S. aluminum producer Alcoa Inc. said in October it is considering construction of a smelter in Sarawak that would use Bakun power. (HNN 10/17/07) Global miner Rio Tinto Ltd. plc also has said it plans to develop an aluminum smelter in Sarawak to use Bakun power.

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