KUALA LUMPUR: Tenaga Nasional Bhd is considering setting up a RM10bil (US$2.4bil) Islamic bond programme as it braces for electricity sector reforms.
The power giant asked banks to submit proposals for the sukuk programme, according to people familiar with the matter, who asked not to be identified as the information is private.
Tenaga, the dominant power supplier across Peninsular Malaysia and Sabah, is bracing for the government’s move to lower prices for consumers by opening up the retail electricity sector.
The company is seeking to expand its renewable assets, with plans to increase such capacity to 1,700 megawatts by 2025, from 332 as of end-2018, local newspaper The Star reported Nov. 9, citing Chief Executive Officer Amir Hamzah Azizan.
Tenaga would use the proceeds from the planned sukuk program for capital expenditure, investments, refinancing and working capital, the people familiar said.
Discussions are still early and Tenaga may decide not to proceed with the plan. A representative for the company didn’t immediately comment when contacted on the matter.
Tenaga last tapped the domestic debt market in October 2017 when it sold RM3.67bil of Islamic bonds, part of a RM5bil programme started that same year. - Bloomberg
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