The 13th World Islamic Economic Forum ‘Disruptive Change: Impact and Challenges’ Hydropower Development and Community Transformation in Sharbini Suhaili Group Chief Executive Officer Sarawak Energy Berhad About Sarawak Energy

• Fully integrated power utility and energy development company, wholly owned by the state of Sarawak • Generates power through hydro and thermal (coal and gas) • Serving a population of 2.6 million covering 650,000 domestic, commercial, industrial and export customers through an extensive transmission and distribution network. • Multidisciplinary workforce of 5,000 • Lowest tariffs in Malaysia and amongst the lowest in South East Asia

2 Holistic View of Energy Development

• Balanced energy development • drives socio economic transformation • requires energy reliability, sustainability and affordability

• Sarawak Energy is focused on • A balanced generation mix for energy reliability and security • Affordability, we offer amongst the lowest tariff in the region, through hydropower development • Sustainability - 75% renewable hydro energy, guided by the international best practices such as IHA Sustainability Assessment Protocol

3 Expected Demand - Supply Scenario 1985 – 2035

Today (4,652MW)

4 Generation Mix and Installed Capacity 15 0.7% .7% 16 • Predominantly renewable hydropower 0.9% • Balance of thermal to maintain diversity and .4% 20 security of supply 13 67 .7% 2025 .8% .2% 7,048MW 64 10 0.2 2.5 .6% .3% %12 % 2020 .8% 74 5,341MW .2% 130.9 13 2016 Generation Type .8…% .1… 4,652MW Hydro Coal Gas 12 2000 Diesel Alternative Energy .1… 60 827MW 5 .2… Sarawak Corridor of Renewable Energy (SCORE)

SCORE is a comprehensive economic plan to transform Sarawak into a high income state by: • harnessing Sarawak’s abundant energy resources • attracting and developing international energy intensive industry

Five growth nodes strategically selected to focus investment effort within the corridor

6 Hydropower for Industry: A Sustainable Competitive Advantage Levelised Cost of Energy by Technology (USD Cent/kWh)

Diesel 16.6 Wind (Off Shore) 15.2 Small Solar (Residential) 13.8 Large Solar 11 Source: IRENA Renewables 2017 – Nuclear 9.7 Global Status Report, IEA – Southeast Asia Energy Small Hydro 8.5 Outlook 2015, Wind (On Shore) 7 Lazard’s LCOE Analysis Version 10 (2016) & Sarawak Energy’s Geothermal 6 Analysis Team;

Coal 6 All values using average Gas CCGT 5 except Diesel(USD78/bbl), Small Solar (Residential) and Large HydroLarge Hydro 4 Nuclear using low end estimates 0 2 4 6 8 10 12 14 16 18

7 Among the Lowest Tariffs within ASEAN - for Residential, Commercial and Small Medium Enterprises

18 16.1 16 14.6 14 12 10.9 10 8.4 9.1 7.4 7.6 8 6.6 6 US$ Cent/kWh 4 2

0 Source: • Malaysia Energy Statistic 2016 except Sarawak PLN Sabah Vietnam West EGAT Singapore Meralco • Vietnam based on KPMG Report 2015 Indonesia Malaysia Thailand Philippines • PLN Indonesia based on PLN Annual Report 2015

8 Industrial Park Success in Attracting Energy Intensive Investors

Samalaju Port Power Substation Press Metal Sakura Ferroalloy

SIG Iwatani & Water Treatment Plant Comtec Solar

OCIM Malaysia Sewage Treatment Plant Pertama Ferroalloys

Samalaju Resort Hotel OM Materials

Aerial view of Samalaju Industrial Park Source: Recoda

9 Realising our Regional Ambition

LEGEND Transmission infrastructure • Strategic location – located connections outside of at the centre of APAC Potential Power Development Sarawak in Myanmar • Competitively priced electricity tariffs

Potential Power Export for Brunei and Sabah • Ease of export with excellent connectivity Potential Power Development in North Kalimantan • Reliable, sustainable and renewable of energy supply

10 Hydropower Development in Sarawak

Good Management of Natural Resources

Bakun Hydroelectric Plant 11 Hydropower Potential in Sarawak Lawas HEP 47MW In operation Limbang1 HEP 45MW Construction Kota2 HEP Limbang2 HEP 10MW Potential 130MW Trusan2 HEP Mi 240MW ri

Baram1 HEP Percentage of Land Use for 1,180MW Identified and Potential Hydro Electric Project (HEP) in Sarawak – ONLY 2%

Baram3 HEP Belaga HEP 300MW Existing 3 160MW HEPs, 1% Kapit Non Kuching Murum HEP HEP Potential 10 944MW used, … HEPs, 1% Linau HEP 182MW Non HEPOther, 98% HEP 108MW Bakun HEP 2% 465MW Baleh HEP 12 1,285MW 2,400MW Hydroelectric Plants (HEPs)

Batang Ai Bakun Murum Baleh 1285MW Installed Capacity 108 MW Installed Capacity 2,400MW Installed Capacity 944 MW Installed Capacity Expected date of Commissioned in 1984 Commissioned in 2011 Commissioned in 2014 commissioning : 2025

Our HEPs are developed according to International Commission on Large Dams (ICOLD) standards and guidelines which ensure they are built and operated safely, efficiently, economically and are environmentally and socially equitable. 13 Carbon Intensity for Electricity Supply in Sarawak since Major Hydro Development

1

0.9 0.87 0.78 0.8 0.72 0.7

0.6 Bakun 0.57 Power 0.5 Intake 0.44 0.33 0.4 0.31 tCO2/MWh 0.3 Muru Carbon Intensity 0.2 m Power 0.24 decreased by 0.1 Intake

0 72% 2009 2010 2011 2012 2013 2014 2015 2016

14 Sustainability

15 Sustainability in Sarawak Energy

“Managing our business to minimise any negative impact of our operations and maximise the positive impact of what we do for our community.”

Sarawak Energy in IHA 2015, Beijing Sarawak Energy in IHA 2017, Addis Ababa 16 Partnerships with International Sustainability Associations & Best Practices

Sarawak Energy is a Platinum Member of International Hydropower Association (IHA) we are an elected board member

2017 IHA BoD Sarawak Energy is a member of UN Global Compact Network Malaysia (2017) and EVP CS is a advisory board member

37 Sarawak Energy is a Gold Member of the Global Reporting Initiatives since 2016

17 Alignment with UN Sustainable Development Goals

UN Sustainable Development Goals

Sarawak Energy Sustainability Report 2016 has been endorsed by GRI on the accuracy of SDG linkage to relevant 2014-2016 indicators and verified by Sustainability PWC Reports 18 18 Rural Electrification

SDG Goal No. 7 : Ensure access to affordable , reliable , sustainable energy for all

Target : 100% electrification by year 2025 State Domestic Coverage : 95% in 2017 Rural Coverage : 89% in 2017

Remaining about 1,600 villages and 36,000 Electrified households are yet to be electrified. Unelectrified

Development of mini/micro hydro & solar generation systems for remote communities under Sarawak Alternative Rural Electrification Scheme (SARES)

19 Case Study : Murum HEP Resettlement

20 Pre Murum HEP

Affected Communities: “Managing our business to minimise any negative impactImpact of Semi Nomadic Lifestyle of our operations and maximise the positive impactLow literacy rate – limited access to formal of what we education do for our community.” Sub standard housing

Great distance to proper health services

No provision of basic infrastructures

Limited access to markets for alternative business opportunities

21 Post Murum HEP : Standard longhouses with basic amenities 24/7 electricity and water supply

22 Access to Education

Schools for Tegulang & Metalun Resettlements

Flagship Murum Penan Literacy Programme For some 400 Penan adults to close the literacy gaps

23 Sustainable Livelihood through Handicraft Marketability Entrepreneurship support by diversifying artisan's craft skills through training and marketing exposure

24 24 Positive Disruption through Hydropower Development

- Platform for socio-economic transformation - Renewable, affordable energy for Sarawakians - Reduction of carbon intensity of electricity supply - Uplifting living standards of affected communities Enhanced Accelerated Infrastructure Standard Development of Living Increased Jobs, & Business Opportunities Improved Amenities

25 Link to video THANK YOU