Launch Partners

Tuesday, October 4, 2022

Launch Partners

Cenergi RE secures green club financing facility to develop biogas power plants

Cenergi RE secured a dual-tranche green club financing facility to fund the acquisition and development of biogas power plants on the 24th September 2019. The syndicated facility, comprising an Islamic tranche and a conventional tranche and worth RM100 million (US$22.43 million), was equally provided by MIDF Amanah Investment Bank and China Construction Bank Malaysia.

Cenergi RE is the renewable energy arm of Cenergi SEA, a sustainable energy solutions company specializing in reducing carbon emissions through investment in renewable energy and energy efficiency projects. Cenergi SEA, a subsidiary of Khazanah Nasional, is also a player in the sustainable Sukuk space, issuing an ASEAN SRI green senior Sukuk Wakalah facility in 2021.

The proceeds from the green club financing facility will be utilized to fund the development of multiple biogas projects, which contributes positively toward Malaysia’s goal of increasing its portfolio of renewable energy generation mix to 20% by 2025.

The facility enables Cenergi RE and the project companies to leverage a single facility to fund various projects. For projects eligible under Malaysia’s Green Technology Financing Scheme, Cenergi RE will benefit from savings on the financing cost through the 2% rebate on profits provided by Credit Guarantee Corporation Malaysia (CGC) while financiers will enhance their security position through the 60% guarantee on the financing amount by the CGC.

“The green club facility signals a vote of confidence to other industry players that financial institutions are now more supportive toward renewable energy projects, particularly biogas which have received less publicity and growth compared to other more mature sources such as solar and hydro. It displayed the growing confidence of the financiers in the potential and viability of the biogas sector in Malaysia”, a spokesperson from MIDF Amanah Investment Bank shared.

The energy produced by the biogas power plants is sourced from methane, which is procured from the decomposition of organic waste. The end-to-end biogas projects produce both electricity and clean methane gas, while reducing carbon emissions and improving wastewater quality. Biogas plants have a dual environmental benefit: reducing greenhouse gas emissions and providing a clean and renewable energy source for heat and power generation.

Cenergy RE Green Club Financing Facility (Islamic tranche)

RM50 million (US$11.21 million)


24th September 2019
Summary of terms and conditions
Principal amount
RM50 million (US$11.21 million)
Type of facility
Islamic term facility
Structure
Murabahah via Tawarruq
Use of proceeds
To partly finance the acquisition and development of biogas power plants by the subsidiaries of Cenergi RE
Guarantor
Cenergi SEA
Principal advisors
MIDF Amanah Investment Bank
Legal advisor
Adnan Sundra & Low
Governing law
Malaysian law

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