Citaglobal Bhd has entered into a Joint Development Framework Agreement (JDFA) with SUS Holding Limited, a wholly owned subsidiary of the ultimate holding company Shanghai SUS Environment Co Ltd. (SUS Environment), China's largest solid waste incinerator supplier and a leading developer of integrated environmental solutions.
The agreement aims to foster collaboration on waste-to-energy (WtE) in Pahang converting municipal waste into green energy and the development of agriculture waste such as empty fruit bunches (EFB) and palm oil sludge, into biomass energy in Malaysia. This further solidifying commitment of both companies to advancing sustainable solutions for the country's waste management and energy needs.
The JDFA aligns with the shared vision of both SUS Environment and Citaglobal to comprehensively address Malaysia's waste disposal challenges while promoting the nation's transition to clean energy.
The signing of the JDFA marks a significant milestone in the partnership between SUS Environment and Citaglobal. This collaboration was initially formalised through a Memorandum of Understanding (MoU) at the 20th China-ASEAN Expo and China-ASEAN Business and Investment Summit on September 17, 2023.
This JDFA is legally binding, and shall be used as the basis for the shareholder's agreement for the incorporation of the joint special purpose vehicle (SPV) 51 (SUS Environment): 49 (Citaglobal) to be executed within six months from today's agreement.
Under the JDFA, SUS Environment will contribute the required preliminary seed investment and financing to initiate identified projects. The company will also oversee engineering, procurement, construction, and commissioning (EPCC) for these projects and manage commercial operations upon completion.
Citaglobal's responsibilities will include sourcing municipal waste in Pahang and sourcing palm oil EFB and sludge oil waste in Malaysia that can be converted into electricity and resold as renewable energy.
Additionally, Citaglobal will secure the necessary regulatory approvals and engage with local authorities to ensure the projects' successful implementation.
The proposed SPV's initial paid-up share capital is RM1 million which RM510,000 by SUS Environment and RM490,000 by Citaglobal that is subject to the Business and Development Plan to be agreed by both Parties. The initial investments from both SUS Environment and Citaglobal will be allocated as working capital as per the Business and Development Plan.
SUS Environment, a government-linked enterprise based in China, possesses extensiveexperience in urban solid waste treatment, eco-industrial park construction, waste-to-energy (WtE) engineering, procurement, construction, operations, maintenance, and agricultural and forestry waste treatment.
The company has been recognised as one of the "top ten influential enterprises" in China's solid waste industry for several consecutive years. Together with its Japanese partner, Hitachi Zosen Corporation, a global clean technology leader, SUS Environment has successfully delivered over 1,000 WtE plants worldwide.
Citaglobal's Executive Chairman and President, Tan Sri Dr. Mohamad Norza Zakaria, said, "Modern waste management is about 'turning trash into treasure,' recognising that waste can be a valuable resource when managed effectively. Contemporary waste management extends beyond mere disposal. It now entails the efficient management of waste to minimise its environmental impact while maximising resource utilisation.
"Our collaboration with SUS Environment will focus on reducing waste generation, promoting waste repurposing, and ensuring compliance with environmental regulations. This collaboration with SUS Environment is a significant step towards achieving our shared vision of promoting sustainable waste management practices in Malaysia In Malaysia, 38,000 tonnes of solid waste are collected daily and dumped in landfills, occupying 150 acres of land each year. The government has acknowledged the need for implementing one waste-to-energy (WtE) plant in every state to address this issue.
Annually, Malaysia generates an average of 14 million tons of municipal waste, which can be converted into valuable green, renewable fuel feedstock for heat and power generation in conventional combustion, gasification, or pyrolysis systems. By entering the WtE industry with SUS Environment, we will bolster our renewable energy capabilities and broaden our presence in this crucial market."