STS, a Malaysian PV system installer. has closed a MYR 91.5 million financing agreement with Bank Islam Malaysia Berhad for a 29.99 MW solar project.

STS, a subsidiary of renewable services provider Kumpulan Gading Kencana Sdn Bhd, will use the financing from Bank Islam to cover the solar farm's capital expenses, including the refinancing of the land and development costs.

The solar installation in Bidor, Perak, Malaysia, will supply electricity to Tenaga Nasional Bhd under the New Enhanced Dispatch Arrangement (NEDA) mechanism.

The NEDA is an initiative under Malaysia’s Energy Commission that allows merchant generators to participate and sell energy on the single buyer market, in order to enhance competition and lower electricity prices.

With the signing of the agreement, Bank Islam has become the first Islamic banking institution to provide financing to private companies under the NEDA.

“This financing will aid in Malaysia's energy transition, from power generation based on fossil fuel and coal to renewable energy sources like solar power, thus promoting the adoption of eco-friendly solutions while bolstering the economy for a more prosperous and resilient future,” said Bank Islam Group Chief Executive Officer Dato’ Mohd Muazzam Mohamed.

Malaysia has set a target of achieving net-zero emissions by 2050. The country had deployed 1,933 MW of solar by the end of 2022, according to figures from the International Renewable Energy Agency.