AmResearch has made an 'overweight' call on Sarawak Energy Bhd (SEB), backed by its target to set aside RM22 billion to expand its footprint over the next 10 years.
In a research note today, AmResearch said SEB has signed a power purchase agreement (PPA) to buy power at 6.25sen/kilowatt hour from Sarawak Hidro Sdn Bhd.
"We have learnt the first of the 2,400 megawatt (MW) Bakun dam's eight turbines is due to be fully-commissioned by August, while the construction of the 944MW Murum Dam is due to be completed by end-2013, making a total supply of 3,344 MW," it said.
AmResearch said the Bakun PPA would give SEB a firm position to offer long-term supply of sustainable power supply at attractive rates as a major attraction of Sarawak Corridor of Renewable Energy (SCORE).
"A key takeaway is that demand for power within SCORE has already exceeded what SEB is able to supply at this juncture," AmResearch said.
It said SEB also planned to boost its generation capacity to 7,000MW by 2020 from 1,328MW, which may include construction of five more hydro dams.
AmResearch said SEB's accelerated capital expenditure programme would trigger a fresh roll-out of over RM2 billion worth of basic infrastructure projects required to support the massive investment, expected to come in batches from June onwards.
It said its top Sarawak picks were Hock Seng Lee Bhd, Naim Holdings Bhd and Press Metal Bhd. -- Bernama
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