Jaycorp subsidiary to procure new biomass boiler for RM40.6mil

KUALA LUMPUR: Jaycorp Bhd via its 60%-owned subsidiary Jaycorp Green Energy Sdn Bhd (JGE) has awarded an engineering, procurement, construction and commissioning (EPCC) RM40.6mil contract to Wasco Thermal Sdn Bhd for the construction of a new biomass boiler system in Jalan Besi, Pasir Gudang Industrial Zone, in Johor.

Wasco Thermal, a specialist in customised steam boilers powered by biomass waste, oil and natural gas as well as energy system projects, is a 60%-owned subsidiary of Wasco Bhd.

According to a statement issued by Jaycorp, the new biomass boiler system with a steam generation capacity of 70 tonnes per hour will help JGE meet the growing demand from its customers.

The company said it has reached full production capacity and is unable to meet the total steam demand capacity of more than 120 tonnes per hour.

"This expansion project will enable JGE to significantly enhance its rated biomass steam production capacity up to a total maximum of 95 tonnes per hour, ensuring a reliable supply to support its customers' growing needs," it said.

The project is expected to be financed primarily by bank borrowings, supplemented by internally generated funds.

The works shall commence upon acceptance of the contract, and are expected to be completed by financial year 2027.

Wasco Thermal is expected to provide a performance bond of 10% of the contract sum or allow Jaycorp to retain a 12% retention sum from milestone payments.

Upon completion of the project, either the performance bond will be replaced with a warranty bond or the retention sum will be held over a 12-month warranty period.

Jaycorp shall in turn pay a downpayment of 5% of the contract sum.