KUALA LUMPUR: Sarawak Energy Bhd can take on more debt to buy Sarawak Hidro Sdn Bhd, which owns and operates the Bakun hydroelectric plant, says RAM Ratings.
The ratings agency said on Tuesday Sarawak Energy can also take on the existing debts of Sarawak Hidro, provided the group maintains its existing planned capacity expansions.
“The existing debts of Sarawak Hidro after the proposed acquisition could be offset by future payment obligations to Sarawak Hidro under the power-purchase agreement between the two parties – these have already been considered by RAM as adjustments to Sarawak Energy’s debt,” it said.
RAM Ratings also said in addition, Sarawak Energy’s ownership of Sarawak Hidro could result in long-term savings in electricity generation cost and economies of scale, with full details.
This is pending finalisation of the proposed acquisition which was recently announced by the Sarawak Chief Minister.
Sarawak Energy is a vertically integrated electricity group with a monopoly over the transmission and distribution of electricity in Sarawak.
The group has a RM15bil Sukuk Musyarakah Programme (2011/2036), rated AA1/Stable by RAM.
Sarawak Hidro – the owner and operator of the 2,400-MW Bakun plant – is the sole independent power producer in Sarawak.
“Should the proposed acquisition of Sarawak Hidro be completed, Sarawak Energy will fully own all generation plants in the state,” it said.
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