Kuala Lumpur: Jaycorp Bhd, through its majority-owned subsidiary Jaycorp Green Energy Sdn Bhd (JGE), has awarded a RM40.6 million engineering, procurement, construction and commissioning (EPCC) contract to Wasco Thermal Sdn Bhd. The contract is for the development of a new biomass boiler system located in Jalan Besi, within the Pasir Gudang Industrial Zone in Johor, reports The Star.
Wasco Thermal, a specialist in customized steam boilers powered by biomass waste, oil, and natural gas, as well as energy system projects, is itself a 60%-owned subsidiary of Wasco Bhd.
In a statement released by Jaycorp, the company highlighted that the new biomass boiler system, boasting a steam generation capacity of 70 tonnes per hour, is crucial for JGE to meet the increasing demand from its customer base.
Jaycorp explained that JGE has reached its full production capacity and is currently unable to satisfy the total steam demand, which exceeds 120 tonnes per hour.
“This expansion project will enable JGE to significantly enhance its rated biomass steam production capacity up to a total maximum of 95 tonnes per hour, ensuring a reliable supply to support its customers’ growing needs,” the company stated.
The project’s financing is expected to come primarily from bank borrowings, supplemented by funds generated internally by Jaycorp.
Construction is slated to commence upon acceptance of the contract and is projected to be completed by the financial year 2027. As part of the agreement, Wasco Thermal is expected to provide a performance bond equivalent to 10% of the contract value or allow Jaycorp to retain a 12% retention sum from milestone payments.
Upon the project’s completion, the performance bond will either be replaced with a warranty bond, or the retained sum will be held for a 12-month warranty period. In turn, Jaycorp will make a down payment of 5% of the total contract sum.
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