Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) recently secured a subcontract worth RM1.5 billion to build an offshore substation at a wind farm in the Netherlands. The fabrication works of the substation platform will begin in CY25 for 36 months and is expected to be completed by CY28.
MIDF Research in a note today (June 5) said that they believed that this subcontract is a crucial step to achieving MMHE’s ESG milestone, while also adding value to the group’s EPCC for offshore platforms and jackets to include clean energy infrastructure as well. The project signifies MMHE’s commitment to advancing clean energy solutions, while serving TenneT’s offshore wind programme through constructing and supplying for the offshore substation.
MIDF expected that, with MMHE’s expertise in EPCC for offshore structure, and barring any changes to the subcontract, the project would contribute positively to MMHE’s financial performance in the long run.
Considering that this project is still in its preliminary stages, MIDF made no changes to their forecast projection for MMHE, and maintain their BUY call, with a TP of RM0.65.
MIDF said the substation, which will comprise a 30kT topside and 10kT jacket, is part of TenneT BV’s landmark two-gigawatt project in Europe. The substation will receive power produced from the wind farm and stepped up before being transmitted onshore. This is in tandem with the collective commitment from Germany, the Netherlands, Denmark and Belgium to install at least 65 GW of offshore wind energy by CY30.
The project, named the Nederwiek 1, is MMHE’s second offshore wind project, which highlights the group’s commitment to sustainable energy infrastructure development as well as the support for the rapid development of large-scale offshore wind infrastructure projects, which are crucial to Europe’s energy transition aspirations.
