ADB Assists Melaka On US$50 Mln PPP Road Lights Project

SINGAPORE, July 12 (Bernama) -- Asian Development Bank (ADB) and Melaka Green Technology Corporation have signed a transaction advisory services agreement that will pave the way for a public-private partnership (PPP) project to install energy efficient road lights in Melaka. The Melaka Road Lighting project plans to install over 100,000 smart light-emitting diode road lamps across the state using a digital networked lighting system. The project, which is expected to cost about US$50 million (US$1=RM3.993), will improve lighting, lower energy costs, reduce carbon dioxide emissions and strengthen road safety. It will support Malaysia's drive to cut its greenhouse gas emissions intensity by 40 per cent by 2020 and will be an important initiative under the Sustainable Urban Development Program for the Indonesia-Malaysia-Thailand Growth Triangle. The project will be financed using private capital. "We are very pleased to support the initiative of the state of Melaka to improve the efficiency of public services with the advanced technology and PPP. "We hope that this project will become a leading new business model for energy efficiency that can be replicated in other parts of Asia and the Pacific," ADB President Takehiko Nakao said in a statement issued here following the signing of the agreement Tuesday. The agreement was signed by ADB Head of the Office of Public-Private Partnerships (OPPP) Ryuchi Kaga and Melaka Green Technology Corporation Chief Executive Officer Kamarudin MD Shah. It was witnessed by Nakao and Melaka Chief Minister Idris Haron. The project is being supported by OPPP, which was established in September 2014, to provide independent transaction advice on specific deals and to develop broader PPP knowledge in the region. Under the advisory agreement, ADB will carry out a detailed project study, develop a bankable PPP structure, design a procurement strategy to identify and select a suitable private sector partner, and advise on the selection of and negotiation with the private sector partner. A key feature of the project is a planned 'pay through savings' model with the financing costs to be reimbursed over time as a result of reduced spending on lighting through the replacement of older, more energy-intensive lamps. The Manila-based ADB is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB, which is owned by 67 members, including 48 from the region, will mark 50 years of development partnership in the region in December 2016. Last year, ADB assistance totalled US$27.2 billion, including co-financing of US$10.7 billion. -- BERNAMA