IOI leases 1,300 acres in Bahau for TNB's 500MW solar farm

IOI Corporation Bhd will lease about 1,300 acres of its land in Bahau, Negeri Sembilan, to a new company that will build a 500MWac solar farm with a 250MW/1,000MWh battery storage system. IOI will also own 25% of that company. It is IOI's first large-scale renewable energy project.

IOI's subsidiary Luminous Aspect Sdn Bhd signed the joint venture agreement on 3 November with TNB Renewables Sdn Bhd and CSP 500MW Sdn Bhd, a company set up by 12 small and medium enterprises. The joint venture company, Bahau Energy Ventures Sdn Bhd, signed a long-term lease for the land with IOI the same day. Neither the rent nor the length of the lease has been disclosed.

Who owns what

• TNB Renewables, 70%: the asset manager. It runs engineering and procurement, names the chairman and appoints four of the seven directors.
• Luminous Aspect (IOI), 25%: two directors. It also has first right to buy up to 5% if the SMEs sell.
• CSP 500MW (12 SMEs), 5%: one director.
• Money: total equity is capped at RM606.2m: TNB RM424.4m, IOI RM151.5m and the SMEs RM30.3m. Up to 80% of the cost can be borrowed.
• Lock-in: shareholders cannot sell for two years after the plant starts.
• Contracts: IOI and the SMEs may bid for the civil, mechanical and electrical works, at competitive prices.

Who buys the power

The project is built under the Corporate Renewable Energy Supply Scheme (CRESS), which lets companies buy green electricity directly from a renewable energy developer through TNB's grid. Here, the power is backed by TNB's agreement with DayOne Data Centers, a Singapore-based data centre group. In June 2025, DayOne agreed to buy up to 500MWac of renewable energy from TNB over 21 years.

In June 2026, DayOne signed further CRESS contracts with TNB Renewables and TNB Power Generation for about 1.5GWp of solar and 2.2GWh of battery storage, partly ground-mounted and partly floating solar on hydro dams. DayOne runs hyperscale campuses at Nusajaya Tech Park and Kempas Tech Park in Johor.

What IOI gets

MBSB Investment Bank estimates that IOI will earn RM14m to RM16m a year from its financial year 2029. The bank expects the project to cost up to RM2b and to start running in 2029, after the CRESS agreements are finalised in the first half of 2027. TNB's filing caps total equity at RM606.2m. If that is 20% of the cost, the project would be about RM3b.

According to MBSB, IOI's income comes from three sources over the 21 years: its share of the joint venture's profits, rent for the land, and interest on shareholder loans. IOI group managing director Datuk Lee Yeow Chor said the company expects "stable long-term recurring income" as both a shareholder and "the lessor of the project site."

The land in numbers

• 1,300 acres for 500MWac is about 2.6 acres per MW.
• Equity: IOI's RM151.5m maximum works out to about RM116,500 per acre of its land.
• Rent: the only solar land rent disclosed on Bursa so far is Pekat's 470-acre lease in Sungai Petani, at RM350 an acre a month, signed in September 2026.

Chart: industrialandland.com.my, from TNB's Bursa filing, IOI's statement and MBSB Investment Bank via Bernama/RTM.