Malaysia’s Sime Darby forms venture for stake in 2,400-MW Bakun

Malaysian conglomerate Sime Darby, which is building the 2,400-MW Bakun hydroelectric project, announced its new venture, Synergy Drive Bhd, received Malaysian government approval to buy a 60 percent stake in the hydroelectric project.

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. 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)

Contrary to news reports earlier in the year, Sime Darby is still waiting for government approval for it to build 700-kilometer undersea transmission lines that would link Bakun to mainland Malaysia, state news agency Bernama quoted Sime Darby Chief Executive Ahmad Zubir Murshid saying. (HNN 7/23/07)

Malaysian newspaper the Edge said November 17 that a consortium led by Sime Darby is likely to receive a letter of intent soon for the multi-billion ringgit transmission job. It quoted unidentified sources saying Sime Darby would get a majority stake in the cable consortium, with monopoly utility Tenaga Nasional, Sarawak Energy, and the finance ministry holding minority stakes.

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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