RP Hydro (Kelantan) (RPHK) issued a RM975 million (US$214.52 million) single-issuance Sukuk on the 14th July 2023, a spokesperson from Malakoff Corporation (Malakoff), which owns 70% of the ordinary shares of RPHK through its wholly-owned subsidiary Tuah Utama, told ISFI.
“The issuance of Sukuk was completed on 14th July 2023, which is the project financial close date…
“The ASEAN Green SRI Sukuk Wakalah will be utilized to solely part-finance the proposed development and construction of RPHK’s small hydropower plants,” the spokesperson detailed.
The Sukuk will finance three projects in Dabong, Kuala Krai, in the state of Kelantan, namely the 30 MW Serasa plant, the 29 MW Kemubu plant and the 25 MW Kuala Geris plant.
The Sukuk received a final rating of ‘AA3’ from RAM Ratings a day prior to its issuance. Notably, the final rating considers an issuance size of RM975 million while the preliminary rating considered an issuance size which was RM15 million (US$3.3 million) smaller.
Earlier this year, ISFI reported that Malakoff entered into an agreement with Rising Promenade, RPHK and Rising O&M Engineering to develop three small hydropower plants on the 21st March 2023.
In a statement, Malakoff confirmed that the plants, which are set to be completed on the 15th December 2025, will be financed by a combination of SRI Sukuk funds and shareholder funds in an 80:20 distribution.
“The balance of at least 20% thereof shall be funded by the shareholder funds partly via Tuah Utama’s subscription of preference shares in RPHK,” the statement read.
According to the Malakoff spokesperson, the issuer chose to pursue SRI Sukuk to represent RPHK’s goals to contribute to ensuring energy security and reducing greenhouse gas emissions in the development of its hydropower plants.
Notably, the spokesperson did not comment on whether pricing was a consideration for the issuer in deciding to pursue sustainable Sukuk.
In contrast, ISFI previously reported that an expected lower financing rate contributed to Solarvest Holdings (Solarvest), which is also a Malaysian clean energy solutions provider, pursuing sustainable Sukuk. Solarvest is expected to issue its debut Sukuk in the third quarter of this year.