The Board of Directors of Reservoir Link Energy Bhd (“RLEB” or “Company”) is pleased to announce that RL ADS Power Sdn Bhd (“RL ADS”), a 51% owned subsidiary of RLEB, has on 15 August 2022, entered into a Memorandum of Understanding (“MOU”) with one of the world’s leading Iron Flow Long Duration Energy Storage providers from USA (“Partner”).
The purpose of the MOU is for RL ADS and the Partner to work together to deploy at least 200 MW of energy storage solutions in Malaysia, Singapore and Indonesia over the 2023-2027 timeframe. The collaboration may be extended in scope to other countries in Southeast Asia by mutual agreement.
SALIENT TERMS OF THE MOU
(i) The MOU will commence on 15 August 2022 until terminated.
(ii) The scope of a possible collaboration between Parties;
• The Partner will supply energy storage products on an ex-works basis to RL ADS projects located in Malaysia, Singapore and Indonesia (“Defined Market”)
• RL ADS will be responsible for the engineering, procurement, and construction of projects
• The Partner will provide training and certification of RL ADS personnel to enable them to provide commissioning as well as O&M and warranty repair services on supplied equipment. RL ADS will be responsible for furnishing qualified personnel and bearing all training and certification costs
• The Partner will provide commissioning services for initial project deployments. RL ADS is expected to provide support as requested and for RL
ADS training purposes
• Upon satisfactory completion of the training and certification program, RL ADS will be authorized to provide technical support services including commissioning, O&M and warranty repair on equipment in the Defined Market. Authorized service provision by RL ADS will be on a non-exclusive basis and subject to ongoing compliance with all the Partner authorized service provider program requirements
(iii) The MOU shall cover four (4) phases of development;
• Phase 1 – Initial Deployment and Program Planning
• Phase 2 – Development of Energy Center (“EC”) Business Model
• Phase 3 – Conclusion of Multi-year Framework Agreement
• Phase 4 – Roll-out and Execution
(iv) The Partner and RL ADS will negotiate in good faith to enter into a Definitive Agreement which reflects the intentions laid out in this MOU.
The MOU will not have any effect on the share capital and shareholding structure of the Company and there will not be any immediate effect on net assets per share and gearing of the Company. The MOU is not expected to have any material effect on the earnings of the Company and its subsidiaries (“Group”) for the financial year ending 31 December 2022, but is expected to contribute positively to the earnings and net assets of
the Company for the subsequent financial years should the Company enter into any Definitive Agreement arising from the MOU.
The risk factors involved in this MOU at this juncture are minimal and in the event, RL ADS enters into a future Definitive Agreement with the Partner, the Board of Directors and the management of the Company will exercise due care in considering the associated risks and benefits.
None of the Directors and/ or major shareholders, chief executive of the Company and/ or persons connected to them have any direct or indirect interest in the MOU.
The Board of Directors of the Company is of the opinion that the MOU is in the best interest of the Company.
