Tenaga (TNB)

It expects the rising coal prices to have an impact on its income. If the coal price goes above US$120 per tonne, it will start to make losses.

While crude oil prices had dropped, the coal price remained relatively high at US$100 to US$120 per tonne due to the high demand for electricity. The global economic slowdown had not drastically affected demand for electricity.

TNB had secured its coal supply until December next year (2009). The issue now is pricing. It has not locked in all the prices. Most suppliers are demanding an index-linked price which will depend on the prevailing rate at the point of delivery.

With coal prices averaging US$100 to US$120 (RM359 to RM431) a tonne, Che Khalib said, TNB may be able to break even or post a marginal profit for its first quarter ending November 30 2008. It has locked its coal requirements for September to December this year at US$116 (RM416) a tonne.
The Bakun dam project was important to meet the future power capacity of the country. Without Bakun we will have to think of alternative power capacity as substitute. A proposal has been made to the government on the transmission of power from Bakun to Peninsular Malaysia. The Bakun dam project in Sarawak was expected to come on stream in 2010.

TNB expects to receive formal clearance by the government to proceed with its proposal to take over the project.

TNB has discussed with the government and financial agencies of other countries for the larger part of the project's financing.

Financial Results … For its fourth quarter ended August 31 2008, TNB posted a RM282.9 million loss due to higher coal prices and foreign exchange losses.