1Malaysia Development Bhd’s (1MDB) acquisition of power generation assets in quick succession - three large outfits costing RM12.5 billion in a span of 12 months - raised many questions.

Thus, it has the market guessing which independent power producer (IPP) would be next on its list.

urban household electricity poll 290506 bill But then again, so far everything related to 1MDB has raised plenty of questions - with no answers available.

But why IPPs; why not other businesses?

A fund manager explains, “When you have issued so much in debt papers (in this case, almost RM20 billion), you need to buy assets with strong cash flow, such as IPPs or NFOs (numbers forecast operators)...

“Since NFOs are frowned upon and are un-Islamic, 1MDB opted for power assets,” he added.

In earlier articles, KiniBiz examined the flawed business model of 1MDB, the people behind 1MDB, its structure and deals which funnelled funds into partner PetroSaudi International Ltd, and bond issues which were mispriced to the tune of billions of ringgit.

Today we look at 1MDB’s acquisitions of power generation assets.

Jimah Energy for RM1.7 billion?

Latest on the list of acquisitions, according to Bloomberg, is the 1,400MW coal fired Jimah Energy Ventures Holdings Sdn Bhd for a staggering RM1.7 billion.

While news of this acquisition has circulated, 1MDB true to form has kept mum, meaning it is not clear if the acquisition has been concluded.

Questions sent by KiniBiz earlier were unanswered at press time.

The question is why 1MDB is paying so much, and will 1MDB be able to sustain after buying Jimah Energy Ventures Holdings and forking out RM1.7 billion for the power generation assets?

Go to KiniBiz for more .