Sarawak expected to accelerate IPP awards through 2030, says Kenanga

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Sarawak accelerates IPP awards through 2030

Highlights

Sarawak Energy is targeting an increase in generation capacity to 10GW by 2030 and 15GW by 2035, with Singapore and West Kalimantan as key potential export markets.
The 1,285MW Baleh hydro project is expected to begin operations by 2030, while two gas plants in Samalaju and Miri will add up to 2GW in the near term, and 950MW of solar capacity has been awarded or is under development.
The potential EPCC value of 2.2GW–3.7GW of solar projects by 2035 is estimated at RM7.3–12.2 billion, while the five CPS dams could be worth up to RM16.7 billion.

This article was translated from the original. Read the original version by our correspondent here.

Capacity plans and project award pipeline

As reported by The Edge Malaysia, the outlook comes from a Kenanga thematic report following a three-day visit to Sarawak. The state is targeting generation capacity of 15GW, with further growth expected after 2030.

According to Kenanga, Sarawak Energy is targeting an increase in generation capacity from 6GW to 10GW by 2030 and 15GW by 2035, with Singapore and then West Kalimantan as potential key buyers. The research firm said the 1,285MW Baleh hydro project is expected to begin operations by 2030, while near-term capacity growth will be driven by two combined-cycle gas turbine plants in Samalaju and Miri, with combined capacity of up to 2GW.

Kenanga also said Sarawak is becoming more open to private capital participation in infrastructure assets, including solar IPPs, water treatment plants and Cascading Power Sources (CPS) hydro projects. In solar, 950MW has already been awarded or is under development, while around 550MW more could still be awarded to the private sector and may be fast-tracked over the next one to two years to meet the 1.5GW target for 2030.

Sarawak Energy has also issued requests for proposals for five priority river basins under the CPS model. Kenanga expects the earliest realistic final investment decisions in 2027, with Engineering, Procurement, Construction, and Commissioning work starting in the second half of 2027 or in 2028, while full operations would not begin until 2034 to 2035.

Impact on energy costs and contract opportunities

Kenanga believes Sarawak retains a structural advantage over Peninsular Malaysia in terms of energy costs, supported by its hydro base-load capacity, which allows tariffs to remain competitive and attract new industrial development.

However, the firm expects tariffs could rise as more gas-fired capacity comes online, although much of the increase is likely to be borne by new industrial users investing in the state. In this environment, solar power is becoming increasingly attractive.

In terms of project value, Kenanga estimates that the total potential EPCC value of solar projects could reach RM7.3 billion to RM12.2 billion if Sarawak Energy increases solar capacity to 2.2GW to 3.7GW by 2035. The total construction cost of the five CPS dams, meanwhile, could reach up to RM16.7 billion.

Kenanga sees two main avenues for exposure to Sarawak’s infrastructure development: asset ownership through companies such as Ibraco Bhd, Pansar Bhd and Solarvest Holdings Bhd, which could bid alongside partners for solar IPPs, CPS projects and water treatment plants; and EPCC exposure through companies such as Hartanah Kenyalang Bhd and Kee Ming Group Bhd, as the development is expected to generate large contracts spanning solar EPCC, substations and civil works.

Overall, Kenanga said Sarawak continues to offer significant long-term opportunities across asset ownership, with potential extending to 2035, although award cycles may take time and execution timing remains important.

In our earlier report on the proposal for a “user-pays” electricity pricing system for large users such as data centres and energy-intensive industries, we explained the government’s rationale for curbing cost pressures to keep household bills more manageable. The article also covered factors driving up generation costs—including global fuel prices, hot weather and reliance on imported LNG—as well as incentives to switch to time-of-use tariffs to manage demand.

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