UEM Group is set to issue its debut sustainable Sukuk before the 18th January next year, a spokesperson from the Malaysian sovereign wealth fund Khazanah Nasional-owned construction and engineering services provider told ISFI.
The group first announced its plans to tap the Islamic sustainable capital market with the unveiling of its green arm, UEM Lestra, in July this year. In tandem, it announced the establishment of a RM7 billion (US$1.5 billion) SRI Sukuk program with CIMB Investment Bank as the principal advisor. The facilities will be issued under the UEM Olive Capital SPV.
The company will undertake projects in the renewables and storage infrastructure, integrated energy solutions, green or electric mobility sectors as well as in the waste management and recycling space.
In late July 2023, the Malaysian government rolled out the National Energy Transition Roadmap (NETR) announcing 10 flagship energy projects.
One such project is the development of Southeast Asia’s largest hybrid solar photovoltaic power plant as a joint venture between UEM Group and ITRAMAS. Following the announcement, ISFI learned that the solar power plant project will be funded through Islamic financing instruments.
As part of the development of the project, UEM Group signed a number of memorandums with various investors. The group also acquired Payar Investments from Khazanah in July 2023 to further strengthen its green investments.
Payar Investments holds a substantial stake in Cenergi SEA, a sustainable energy solutions provider which issued its debut SRI Sukuk in December 2021.
Inching toward the issuance of the inaugural sustainable Sukuk, RAM Sustainability, RAM Ratings’s sustainability arm, published a second-party opinion on the group’s Sustainability Sukuk Framework on the 16th November 2023.
“The green initiatives to be financed under the framework for renewable energy, energy efficiency, clean transportation and pollution prevention and control have the potential to contribute towards national decarbonization targets as defined in the NETR and the 12th Malaysia Plan,” the rating agency remarked.