KUALA LUMPUR, Oct 18 (Bernama) -- Malaysia Energy Centre chief executiveofficer Dr Hassan Ibrahim criticised financial institutions which were notsupportive of the government's Small Renewable Energy Programme (SREP) andwere sceptical in approving loans to Small Power Producers (SPPs).Dr Hassan said that financial institutions still feel that powergeneration projects under SREP were not viable, sustainable orcommercially driven.

SREP applies to all sources of energy including biomass, biogas, municipalwastes, solar, mini-hydro and wind, he told reporters after the firstphase launching of the biomass-based power generation and cogeneration inMalaysian palm oil industry by Deputy Minister of Energy, Communicationsand Multimedia Datuk Tan Chai Ho here Friday.

Dr Hassan said that each SPP needed between RM40,000 to RM50,000 to buildsmall power generation plant that could generate about 10 MW electricity.So far licences have been issued to three SPP operators and 23 moreapplications have been approved.

Under the SREP, SPP utilising renewable energy can apply to sellelectricity to Tenaga Nasional Bhd through a distribution grid system.

Dr Hassan said that TNB was willing to offer a rate of 17 sen perkilowatt/hour (kWh) to SSP. The rate is much higher than what was offeredto Independant Power Producers (IPP) at between 12 sen to 14 sen kWh.

However, financial institutions still feel that the rate was not conduciveenough for SPP to be sustainable for a long term period, he added.

The US$14 million (RM53.2 million) project which would be carried out overa five-year period was funded by the United Nations Development Programme(UNDP), the government and private sector.

The project would involve biomass information services and awarenessenhancement, policy study and institutional capacity building, financingassistance programme, biomass-based power generation and technologydevelopment programme.

Dr Hassan said that the first phase will concentrate on the usage of palmoil waste as source of energy because palm oil millers in the countryproduced about 14 million tonnes of biomass waste but only a smallpercentage of these products were used to produce renewable energy.

He said that some of the palm oil millers were already generatingelectricity via biomass, but most use the energy for in-house purposesonly. -- BERNAMA