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Vicom enters into solar power purchase agreements worth $2.07 mil in IPTs

Felicia Tan
Felicia Tan12/30/2022 06:58 PM GMT+08  • 3 min read
Vicom enters into solar power purchase agreements worth $2.07 mil in IPTs
According to Vicom, CDG Engie Solar was awarded the contracts following a public tender called by the former.
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Vicom has entered into several solar power purchase agreements with ComfortDelGro (CDG) Engie Solar Pte Ltd. The agreements were in respect to Vicom’s five inspection centres including Kaki Bukit, Sin Ming and Changi North, as well as between Vicom’s wholly-owned subsidiary, Setsco Services, and CDG Engie Solar for Setsco’s premises at Bukit Batok.

Under each of the power purchase agreements, CDG Engie Solar will install, construct, operate and maintain a solar photovoltaic generating plant at each site. CDG Engie Solar is also required to supply electricity generated from the plant to Vicom or Setsco at a fixed tariff. There is a guaranteed minimum annual output for each site.

The estimated total contract value of the power purchase agreements is $2.07 million. The value is computed based on the fixed tariff and an estimated average annual generation output of 1,890 MWh. The duration of the power purchase agreements range between 17 to 25 years. This is to coincide with the remaining lease term for each site. Upon the expiry of each agreement, Vicom or Setsco has the option of requiring CDG Engie Solar to transfer ownership of the plant to Vicom or Setsco at no additional cost.

According to Vicom, CDG Engie Solar was awarded the contracts following a public tender called by the former. CDG Engie Solar was one of the five who submitted their tender proposals, and was deemed the most competitive based on their pricing and proposed solution. CDG Engie Solar also proposed the shortest completion lead time of four months.

The installation and operation of the solar photovoltaic (PV) systems at the six sites will divert Vicom’s energy use away from fossil fuels and towards renewable energy. It is expected to reduce the group’s Scope 2 emissions. The installation is also one of Vicom’s several key sustainability initiatives.

At the same time, the installation of the solar PV systems will help Vicom to maintain a competitive advantage as a sustainable service provider, with cost savings of approximately $7.48 million over the duration of the agreements.

See also: Civmec secures over A$330 mil contract for Rio Tinto Western Range Project

As CDG is a controlling shareholder of Vicom, owning 67.06% of the total number of shares in the latter, the transaction constitutes as an interested person transaction under the SGX’s listing rules.

CDG, through its wholly-owned subsidiary, ComfortDelGro Engineering Pte Ltd, owns 49% of the total number of shares in CDG Engie Solar.

Shares in Vicom closed 1 cent higher or 0.52% up at $1.92 on Dec 30.

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