INTERVIEW-UPDATE 1-Tenaga aims to raise rgt loan for power line

* To seek ringgit loans for Bakun transmission line

* Looking for new site for Sabah coal-fired power plant

* Looking out for M&A opportunities

(Adds details from paragraph 6, analyst comment)

By Julie Goh

KUALA LUMPUR, April 30 (Reuters) - Malaysia's biggest power producer, Tenaga Nasional (TENA.KL), plans to raise ringgit-denominated loans to finance a $2 billion submarine transmission line carrying electricity from Sarawak on Borneo to the peninsula, a senior company official said.

"We are looking at ringgit financing for the transmission line," CEO Che Khalib Mohamad Noh told Reuters in an interview late on Wednesday, but said financing was not expected in the next 12 months.

"We will raise it tranche by tranche because the Bakun project will be spread out over seven years. We certainly don't need financing over the next 12 months," he said.

The cable project involves laying a 730-kilometre high-voltage direct current (HVDC) transmission line and a 670-km undersea cable for the 2,400-megawatt Bakun hydroelectric dam.

Tenaga, the Ministry of Finance and Sarawak Energy (SARA.KL), a unit of the Sarawak state government, are still working out the shareholding structure of the consortium tasked with the cable project, said Che Khalib.

"We are negotiating but we will definitely not own more than 50 percent (in the consortium). It will only be at the associate level," he said.

Analysts said at $2 billion and assuming debt financing of 80 percent and Tenaga's equity shareholding of 30 percent in the consortium, the company would require about $120 million.

FUNDING NOT DIFFICULT

"Funding shouldn't be a problem. They have internal funds and they are not stretched. Gearing up (for the cable project) won't put a significant strain on their balance sheet," said an analyst at RHB Research Institute, who asked not to be named.

Electricity demand in Malaysia has been growing at an annual rate of 6-7 percent since 1997, but will likely contract by 3-4 percent this year due to the global economic crisis, Che Khalib said.