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Friday, September 30, 2022

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reNIKOLA issues SRI Sukuk to fund three solar power plants

reNIKOLA Solar issued a RM390 million (US$88.44 million) ASEAN Green SRI Sukuk on the 11th May 2021 to fund the total development costs of three solar photovoltaic power plants. The company is a wholly-owned subsidiary of reNIKOLA, which owns and operates large-scale solar plants across peninsular Malaysia. The solar plants are projected to generate approximately an average of 123 GWh of clean energy annually throughout the tenor of the Sukuk program. RAM Ratings Services reaffirmed its ‘AA3’ rating on the issuance on the 24th June 2022 in view of the robust energy output of the solar photovoltaic plants and the resulting strong consolidated cash flow generation.

“Despite the challenging economic environment, MIDF Amanah Investment Bank had assisted and facilitated our customer, reNIKOLA, in successfully acquiring the identified renewable energy assets by providing the group with the required bridging facilities pending the establishment and issuance of the reNIKOLA ASEAN Green SRI Sukuk. MIDF Amanah Investment Bank had subsequently successfully achieved full financial close for the reNIKOLA ASEAN Green SRI Sukuk at ideal profit rates and yields with tenors ranging from one year up to 17 years,” the principal advisor of the issuance, MIDF Amanah Investment Bank, commented.

The three projects being financed under the issuance are a 3.996 MWac plant in Arau, Perlis, which commenced operations on the 3rd March 2018; a 29.916 MWac plant in Gebeng, Pahang, which became operational on the 22nd January 2020; and a 30 MWac plant in Pekan, Pahang that started operations on the 29th June 2021. The solar plants are held by SBU Power, RE Gebeng and Halpro Engineering respectively.

The project companies have each entered into a 21-year power purchase agreement with Tenaga Nasional for the sale of the electricity generated by their respective solar plants for a fixed tariff rate for a period of 21 years commencing from the respective commercial operation dates.

RAM Sustainability’s second opinion report on the Sukuk framework found it is aligned with the UN SDG 7 of affordable and clean energy. “RAM Sustainability opines that innovative RE will be a key component in the building of a low-carbon future. According to the International Renewable Energy Agency, renewable sources could account for 65% of global energy use by 2050,” the rating agency said.

reNIKOLA Solar ASEAN Green SRI Sukuk

11th May 2021
Summary of terms and conditions

Issuer

reNIKOLA Solar

Size of issue

RM390 million (US$88.44 million)

Mode of issue

Bought deal, private placement

Purpose

To part-finance and/or part-reimburse the total development costs incurred for three solar photovoltaic power plants.

Tenor

One to 17 years

Issuance price

RM390 million

Payment

Semi-annnual

Currency

Malaysian ringgit

Lead manager(s)

MIDF Amanah Investment Bank, Bank Islam Malaysia

Principal advisor(s)

MIDF Amanah Investment Bank

Bookrunner(s)

MIDF Amanah Investment Bank, Bank Islam Malaysia

Governing law

Malaysian Law

Legal advisor(s)/council

Adnan Sundra & Low

Islamic structure

Murabahah (via Tawarruq arrangement)

Listing

No

Underlying asset

Shariah compliant assets

Rating

‘AA3’ (RAM Ratings)

Shariah advisor(s)

MIDF Amanah Investment Bank

Tradability

Yes

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