No credit concerns due to Edra Energy’s plant delay

“We expect liquidated damages payable to the sole offtaker – Tenaga Nasional Bhd (TNB) – under the power purchase agreement for delays in plant completion to be contractually borne by the EPCC consortium on a back-to-back basis. “For now, we understand TNB has agreed to reassess Edra Energy’s claim for the extension of the scheduled CODs, owing to a force majeure, when each GB achieves its COD and concludes upon the COD of the third GB,” it said.

KUALA LUMPUR: The expected delay for Edra Energy Sdn Bhd to start its 2,242MW combined-cycle, gas turbine (CCGT) power plant in Alor Gajah, Melaka will not pose a credit concern in the immediate term, according to RAM Ratings.

In a statement, the rating agency said Edra Energy’s management had secured standby letter of credit facilities in July 2021 to comply with the finance service reserve account requirement of the transaction.