Malaysia's largest green hydrogen project to begin construction this year after closing $400m in finance

Country: Malaysia
Malaysia's largest green hydrogen project to begin construction this year after closing $400m in finance
27 February 2024

The largest green hydrogen project in Malaysia is set to commence construction in Perak this year, following the successful closure of a $400 million finance deal. Spearheaded by Semarak Renewable Energy, the 60MW facility will be powered by floating solar panels. The financing was facilitated by Capitale Ventures from Singapore, with advisory support from Chalfouh LLC.

Chinese state-owned construction firm PowerChina has been contracted for the design, engineering, procurement, and construction of the project, including both the hydrogen production and storage assets, as well as the floating photovoltaics. Groundbreaking is scheduled for the final quarter of this year.

While the 60MW project marks a significant milestone for Malaysia, larger ventures are in the pipeline. Two projects in Sarawak, on the island of Borneo, are currently in development and promise to exceed the Perak project in scale.

H2biscus, a project with a capacity of 150,000 tonnes per year, is being developed by Korean companies Samsung Engineering, Lotte Chemical, and Korea National Oil Corporation, alongside Malaysia’s SEDC Energy. Front-end engineering and design are underway, with construction expected to commence by the end of this year.

SEDC Energy is also involved in H2ornbill, a 90,000 tonnes per year green hydrogen project, expected to reach a final investment decision in 2025. Japanese firms Eneos and Sumitomo are part of this consortium.

Both Sarawak projects plan to utilize hydropower, which constitutes over two-thirds of the state’s electricity supply, and export the majority of the produced hydrogen to other Asian countries. H2biscus aims to export hydrogen as ammonia to South Korea, while H2ornbill plans to transport hydrogen using methylcyclohexane (MCH) as a carrier chemical.

The Malaysian government has projected significant revenue potential from hydrogen exports, estimating around 648 billion ringgits ($136 billion) by 2050. Additionally, the country intends to bolster domestic hydrogen demand by promoting fuel-cell vehicles and integrating hydrogen into gas-fired power plants, which are expected to generate substantial annual demand between 2041 and 2050.

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