The Malaysian government awarded a grant of about $11.5 million to Tawau Green Energy Sdn. Bhd. for the development of a geothermal project in Sabah.

The Apas Kiri geothermal site is in the southern portion of the Malaysian state near the city of Tawau. It will be the country's first geothermal energy facility. It is expected to come online by early 2015 with a rated net capacity of 30 megawatts.

Tawau Green Energy will build, own and operate the geothermal facility which is expected to cost around $133 million.

The company has signed a power purchase agreement with Sabah Electricity Sdn. Bhd. Power supplied by the facility will be fed into the East Coast Sabah power grid.

According to a statement released by energy company Continental Energy Corporation, which owns 10 percent of Tawau Green Energy, the grant was awarded through the Public Private Partnership Unit of the Prime Minister's Department.

Proceeds from the grant will be used to pay for costs associated with constructing access roads and making related infrastructure improvements for the development of the facility.

The grant was formalized in a facilitation funds agreement which states that the funding will be disbursed by Bank Pembangunan Malaysia Berhad, a development bank owned by the Malaysian government.

The project has been registered and validated with the United Nations Framework Convention on Climate Change under its Clean Development Mechanism program and is enabled to earn certified emission reduction credits for its first 10 years of operation.

When operational, the facility is expected to reduce carbon dioxide emissions by 282,400 metric tons per year and earn the same number of C.E.R.'s. – EcoSeed Staff