(EnergyAsia, March 30) — MayBan Securities has maintained its ‘hold’ recommendations on two power generation stocks, Tenaga Nasional Berhad and Malakoff.


In research note, MayBan said TNB and Malakoff announced that they together with Arabian Company for Water And Power Projects Limited (ACWA) have formed a consortium to bid for a 60% equity interest in the Shoaiba Phase 3 Independent Water and Power Project in Saudi Arabia.


If the bid is successful, Khazanah Nasional will together with TNB and Malakoff form a Malaysian consortium. The shareholdings are as follows: Khazanah (40%), Malakoff (40%) and TNB (20%).


The bidder consortium will hold a 60% interest in a project company that will undertake the project while the balance will be held by agencies of the Saudi Arabia government. The project will be located adjacent to the existing Shoaiba generation and desalination complexes 110 km south of Jeddah, on the western Red Sea coast of Saudi Arabia.


Construction of the project is expected to commence end-2005 and is scheduled to commence operations three years later.


TNB has expressed confidence in winning the US$2.3 billion power and water-desalination plant project in Saudi Arabia. The Saudi government is currently evaluating their bid and have also have called for some clarifications. The results of the bid is expected to be announced by June.


MayBan said: “We reiterate that it is still too early to assess the financial impact of this project for both TNB and Malakoff. Nevertheless, should the TNB-Malakoff consortium win the bid, it could pave the way for more projects in the Saudi Arabia.