The Government has been undertaking efforts to restore the financial status of Sabah Electricity Sdn Bhd (SESB) since 2004 as a step towards increasing the reliability of electricity supply in Sabah. The Energy Supply Division monitors the SESB Turnaround Plan to ensure a smooth implementation of the plan.

The plan has demonstrated its effectiveness by successfully decreasing the SESB deficit while increasing system reliability. Among the steps undertaken under the plan were to reduce operational costs by halting the operations of old and inefficient diesel fuel power stations such as those in Lahad Datu, Semporna, Kudat, Kota Marudu, Kota Belud, Tambunan, Sipitang, Kunak and Kota Kinabatangan; increasing generation capacity by constructing new generation IPPs at Sepanggar Bay (100MW), Ranhill Tuaran (190MW), Lahad Datu (300MW) and increasing capacity at Power Ron (from 120MW to 190MW); implementing an open tender concept for the IPP in Lahad Datu compared to the direct negotiation used previously to ensure transparency and competitiveness; decreasing total system loss from 23 percent in 2003 to 18 percent in 2006; creating a more efficient procurement policy and practice; and increasing the internal SESB control mechanism.