Cenergi and YPJ Plantations Enter MoU on Biogas Power Plant Under Improved Feed-in-Tariff 2.0 Programme
Kota Tinggi, 3 Sept 2025 – Cenergi SEA Berhad (Cenergi), a subsidiary of UEM Lestra Berhad, today signed a Memorandum of Understanding (MoU) with YPJ Plantations Sdn. Bhd. (YPJP) for the development of its first biogas power plant in Kota Tinggi, Johor.
This milestone follows the successful bidding of the project under Feed-in-Tariff (FiT) 2.0 Programme, as recently announced by Sustainable Energy Development Authority (SEDA) Malaysia in July 2025. Under the partnership between Cenergi and YPJP, a subsidiary of YPJ Holding Sdn. Bhd., the renewable energy project will be operational for 21 years upon FiT Commencement Date (FiTCD), with electricity exported to Tenaga Nasional Berhad (TNB)’s grid.
As announced by SEDA last year, the FiT rate under FiT 2.0 Programme is fixed for the first 10 years at the rate of RM0.45/kWh, and the participating developers are given opportunity to bid for the FiT rate for the remaining 11 years.
The 1.2 MW biogas power plant will be developed on approximately four (4) acres of land adjacent to Alaf Palm Oil Mill, owned by YPJP. The plant will process Palm Oil Mill Effluent (POME), capturing biogas from anaerobic digestion. Once operational, it is expected to generate approximately 7 to 8 million kWh of renewable electricity annually which is enough to power 2,000 households in Johor, while significantly reducing greenhouse gas emissions.
Ir. Kwok Yew Hoe, Group Chief Executive Officer of Cenergi SEA Berhad, emphasised the project’s strategic importance, stating, “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.”
He further added, “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.”
YPJP, a subsidiary of YPJ Holdings and also a Johor State Government-linked company held through Yayasan Pelajaran Johor, is engaged in the trading of fresh fruit bunches (FFB) and the production of crude palm oil (CPO), palm kernel (PK), and related products.
Highlighting the significance of the partnership, Tuan Haji Farizal bin Ismail, Chief Executive Officer of YPJ Holdings, said, “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.”
He further expressed confidence in the partnership, adding, “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 socioeconomic benefits for Johor, particularly through job creation and local supplier opportunities.”
The MoU between Cenergi SEA Berhad and YPJ Plantations marks an important step in accelerating Malaysia’s renewable energy agenda under the FiT 2.0 Programme. By converting palm oil mill waste into clean electricity, the project demonstrates the potential of public-private partnerships to drive climate action while delivering tangible environmental and community benefits.
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