RE segment driving domestic SRI sukuk market


PETALING JAYA: The power industry is among the most active sectors tapping the domestic bond market, with a five-year average annual issuance of about RM8.4bil between 2015 and 2019.

RAM Ratings said outstanding power bonds and sukuk amounted to some RM65bil as at end-January 2020, which is equivalent to about 9% of Malaysia’s total outstanding corporate bonds.

“Mirroring the government’s agenda, the power sukuk market was driven by RE projects in 2019. “While the facility sizes are much smaller than those of conventional power projects, the RE segment has been driving Malaysia’s sustainable and responsible investment (SRI) sukuk market, ” the ratings house said. Notable issuers included Telekosang Hydro One Sdn Bhd, Edra Solar Sdn Bhd and Cypark Ref Sdn Bhd.

The government has upsized project scales to help rein in independent power producers’ financing costs and facilitate their access to the sukuk market, as observed in the large scale solar (LSS) three bidding, whereby the maximum project size has been increased to 100MW from the 30MW under LSS three.

RAM said it has rated numerous prominent firsts in the SRI sukuk market, along with innovative financing structures that have involved the pooling of multiple plants that enable smaller IPPs to successfully tap the market.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights
   

Next In Business News

Quick take: BCM rises 3.2% on partnership with rLoop
Maybank IB reinitiates coverage on Hock Seng Lee
Trading ideas: KAB, T7, Unisem, Central Global, CIMB, UMW, BCM
IGB REIT to see continued rental pressure in 3Q
Bezos offers NASA US$2bil in exchange for moon mission contract
Asia Distillates-Gasoil refining margins plunge to over 3-week low
Oil steadies in undersupplied market but coronavirus cases weigh
Coffee prices surge as unusual cold threatens Brazilian production
Markets- Stocks, US$ sluggish, all eyes on Fed meet this week
KPMG resigns as auditor of SCIB

Stories You'll Enjoy


Vouchers