SHAH ALAM - Cenergi SEA Berhad (Cenergi), a subsidiary of UEM Lestra Berhad, has signed a Memorandum of Understanding (MoU) with YPJ Plantations Sdn Bhd (YPJP) to develop its first biogas power plant in Kota Tinggi, Johor, under Malaysia’s Feed-in-Tariff (FiT) 2.0 programme.
The project follows Cenergi’s successful bid under the FiT 2.0 programme, announced by the Sustainable Energy Development Authority (Seda) in July.
Once completed, the 1.2 MW facility will run for 21 years from its FiT Commencement Date (FiTCD), with electricity exported to Tenaga Nasional Berhad’s (TNB) grid.
According to Seda, the FiT 2.0 rate is fixed at RM0.45/kWh for the first 10 years, with developers bidding for rates over the remaining 11 years.
The biogas plant will be built on four acres of land next to the Alaf Palm Oil Mill, owned by YPJP. It will process Palm Oil Mill Effluent (Pome) through anaerobic digestion, capturing methane to generate renewable energy.
Once operational, it is expected to produce seven to eight million kWh annually, enough to power 2,000 households in Johor while significantly reducing greenhouse gas emissions.
Group chief executive officer (CEO) of Cenergi SEA Berhad, Ir Kwok Yew Hoe, stressed the project’s environmental and strategic impact.
“This biogas plant will enable continuous renewable energy generation from palm oil mill waste by capturing methane for fuel while also preventing its release into the atmosphere.
In terms of CO2 equivalent, this is comparable to taking approximately 4,500 cars off the road every year.
“Cenergi currently owns and operates more than 20 biogas plants in Malaysia, utilising organic waste to generate renewable electricity for the national grid.
“Through this partnership, the renewable energy generated from palm oil mill waste will support YPJP’s ESG aspirations and contribute to Malaysia’s renewable energy targets,” he said.
YPJP, a subsidiary of YPJ Holdings—a Johor State Government-linked company under Yayasan Pelajaran Johor—specialises in fresh fruit bunch (FFB) trading, as well as the production of crude palm oil (CPO) and palm kernel (PK).
Highlighting the partnership, YPJ Holdings CEO, Farizal Ismail said the project strengthens Johor’s sustainability leadership.
“This collaboration reflects YPJ Plantations’ commitment to embedding sustainability at the heart of our palm oil operations. By embracing renewable energy solutions, we are reducing our environmental footprint while strengthening Johor’s role in advancing sustainable palm oil practices.
“This is in line with our ESG aspirations and the Johor State’s vision for a greener, more resilient economy. With Cenergi’s proven expertise in renewable energy development, we are confident this biogas project will deliver long-term value.
“In addition to supporting Malaysia’s renewable energy transition, we believe it will also generate socio-economic benefits for Johor, particularly through job creation and local supplier opportunities,” Farizal added.
The MoU between Cenergi and YPJP marks a significant step in driving Malaysia’s renewable energy ambitions under the FiT 2.0 programme, showcasing how public-private partnerships can advance climate action while delivering lasting community and environmental benefits.