Tenaga Nasional Bhd (TNB) has inked a memorandum of understanding with PT PLN, the Indonesian state owned utility company, and PT Bukit Asam, a company primarily involved in coal mining and a holder of the Production Operation Mining Permit in Indonesia.

In an announcement to Bursa Malaysia today, TNB said the agreement will  facilitate cross border electricity-exchange to benefit the two countries.

“Parties will start exploring and studying the best business models, associated risks and financing options to ensure that the contemplated projects can be successfully implemented,” it said.

The agreement also covers the construction of a 275KV interconnection line from Telok Gong in Malacca to Garuda Sakti in Sumatra, Indonesia.

It includes the development and construction of a mine mouth coal-fired power plant in Peranap, Pekanbaru, Sumatra, Indonesia.

TNB said the duration of the agreement is for a period of two years from the date of the execution unless extended by the parties.

The agreement is not expected to have any effect on the issued and paid-up share capital of the group nor any material effect on its earnings and net assets.

- Bernama