Prepared to invest, TNB is set to build upon current success
Investment in infrastructure is required if TNB is to maintain and improve its service provision

TNB is positioned to undertake the investments in infrastructure needed to meet future demand

Tenaga Nasional Berhad (TNB) is aware of the challenges facing the electricity supply industry throughout the world as transmission systems age and the need for power generation grows, as evidenced by the blackouts that hit the eastern United States and Canada in August of 2003, as well as those that occurred in five Malaysian states a month later. In order to ensure that Malaysia’s electricity supply industry continues to provide quality service at the best rates for its ever-increasing population, large investments in capital expenditure (CAPEX) will be required to update and maintain the country’s system.

Between 1990 and 2000, the main Malaysian utilities, TNB, Sabah Electricity Sdn Bhd and Sarawak Electricity Supply Corp, as well as the country’s Independent Power Producers (IPPs), invested more than US$6.5 billion in power generation in the country, and over US$1 billion in both transmission and distribution. However, it is estimated that the industry will require an additional investment of US$8 billion over the next five to ten years– divided into approximately US$5 billion for power generation, and US$1.5 billion each for transmission and distribution. Consequently, TNB has taken measures to curb unnecessary spending within the company and streamline its own costs in an effort to prepare for these future investments.

Much of the new investment in the Malaysian electricity supply industry will be directed to the construction of coal-fired plants, in line with the Malaysian government’s aim of reducing the country’s dependence on natural gas for electricity generation, increasing the share of coal to 30% of the total by 2006. TNB’s recent acquisition of the Kalimantan coal mine in Indonesia will ensure the availability and reliability of coal supply for the company. Other recent developments include the commissioning of TNB Janamanjung Sdn Bhd, a new coal-fired generating plant managed by a TNB subsidiary and with a capacity of 3 X 700MW.

The company has begun power projects in Pakistan, and is looking to expand into other parts of Asia, including the Middle East and India. TNB Liberty Power Limited, a wholly owned subsidiary of TNB Power Daharki Limited, a TNB investment holding company, has agreements to develop and operate a 470MW gross capacity combined cycle natural gas-fired power plant in two phases at Mirpur Mathello, in the Pakistani province of Sindh.

Partnerships between governments are presenting new opportunities for TNB as well. The company has participated in joint missions with government agencies and business councils throughout Asia and the Middle East. TNB is also confident that it will have a role to play in the ASEAN (Association of South East Asian Nations) initiative to strengthen the ASEAN power grid through the optimization of regional resources.