Malaysia's YTL Power seeks nod for new plant-report

KUALA LUMPUR, Jan 5 (Reuters) - Malaysia's YTL Power International (YTLP.KL) is seeking government approval to build a new power plant and extend a deal to sell power to state utility Tenaga Nasional, a newspaper said on Monday, citing government sources.

YTL Power, a unit of Malaysian power-to-property conglomerate YTL Corp (YTLS.KL), wants to extend its power purchase agreement with Tenaga (TENA.KL) by another five years, Business Times newspaper said.

The licence for a new plant, which would double its total capacity, would contradict a 2006 government rule that power plants can only be built on the basis of competitive bidding, the newspaper quoted an unnamed government official as saying.

"The terms of the deal would be too good for YTL and it goes against government policy on new plants," the official said, according to the report.

YTL could not be immediately reached for comment by Reuters.

The newspaper said Malaysia's Energy, Water and Communications Minister Shaziman Abu Mansor confirmed receiving the proposals.

In a separate newspaper report, Deputy Prime Minister Najib Razak was quoted as saying the government plans to renegotiate Tenaga's power-buying contracts with independent power producers (IPPs) to reduce financial strain.

Currently Tenaga purchases all the power produced by the IPPs, which include YTL, regardless of demand, the Malaysian Reserve newspaper said. (Reporting by Varsha Tickoo; Editing by Anshuman Daga)