Launch Partners

Tuesday, January 31, 2023

Launch Partners

Malaysia’s independent power producer secures RM1.1 billion (US$254.92 million) Islamic syndicated financing facility to fund green project

Independent power producer YTL Power International’s wholly owned unit YTL DC South has been granted a RM1.1 billion (US$254.92 million) Islamic term financing facility by joint mandated lead arrangers Malayan Banking (Maybank) and OCBC Bank (Malaysia) to fund the development of a data center in Kulai, Johor.

The Islamic term financing facility, which is YTL’s first green financing facility, is for YTL DC South to develop the 48MW IT load hyperscale data center (HDC) with a commitment to secure Gold LEED certification which shall be in compliance with Green Loan Principles published by Loan Market Association, Asia Pacific Loan Market Association and Loan Syndications and Trading Association. The Islamic syndicated term financing facility is based on the Shariah principles of commodity Murabahah.

The 48MW HDC is part of YTL Power’s plans to develop Malaysia’s first 500MW green data center park in Kulai, Johor to be integrated with on-site solar photovoltaic power which aims to provide data storage colocation services to clients looking for more sustainable and lower carbon solutions within Southeast Asia. The data center park will be powered by renewable solar energy, as YTL Power aspires to achieve carbon neutrality by 2050.

Located 30km from Singapore in the Iskandar region of Johor, the YTL Green Data Center Park will have dark fiber connectivity to Singapore, which is intended to benefit companies with operations in the city-state looking to expand, complement and optimize their data center processes. The dark fiber connectivity will provide direct and ultra-low latency network connections to data centers in Singapore and other locations in Malaysia.

Meanwhile, RAM Ratings recently revised YTL Power’s long term rating outlook to stable from negative while concurrently reaffirming the ‘AA1’ ratings of its RM2.5 billion (US$579.37 million) Sukuk Murabahah facility (2017/2027).

For the first financial quarter ended on the 30th September 2022, YTL Power’s net profit jumped almost five times year-on-year on stronger contribution from its power generation business thanks to higher retail prices in Singapore.

Its net profit soared to RM173.28 million (US$40.16 million), from just RM35.4 million (US$8.2 million) a year ago, while revenue grew 35% over the same period to RM4.74 billion ((US$1.1 billion) from RM3.51 billion (US$813.43 million).

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