TNB unit issues RM2bil sustainability sukuk

PETALING JAYA: TNB Power Generation Sdn Bhd (TPGSB), a wholly-owned unit of Tenaga Nasional Bhd (TNB), has raised RM2bil via the issuance of a new sustainability sukuk wakalah, pursuant to its sukuk wakalah programme.

In a filing with Bursa Malaysia, the utility stated the new issuance was in four tranches with sizes of RM200mil, RM600mil, RM300mil and RM900mil.

The tranches are for a respective tenure of seven, 10, 15 and 20 years, with the last batch also carrying the highest periodic distribution of 4.84% per annum, while the first tranche is carrying the lowest periodic distribution of 4.3% annually.

TNB said the sustainability sukuk was oversubscribed by 2.02 times, representing an order book size of RM4.04bil against the issuance size of RM2bil, with interest garnered from a broad range of investors, thereby allowing the initial issue size of RM1.5bil to be upsized to RM2bil.

TNB said the proceeds raised from the issuance shall be utilised by TPGSB for eligible “projects that meet the criteria” as set out in the latter’s sustainability sukuk framework.One of the projects in question is the Nenggiri Hydroelectric power plant project, which is an impoundment hydroelectric power plant located in the district of Gua Musang, Kelantan and is within the Sungai Nenggiri catchment.

As such, the proceeds from the issuance will be appropriated by TPGSB to repay loans obtained to finance the development costs related to the planning, design, engineering and construction of the Nenggiri project.

Incidentally, the TPGSB sustainability sukuk framework has been accorded a “gold” rating by independent external reviewer MARC Ratings Bhd.

TPGSB owns and manages 14 power plants as well as runs three power plants for TNB, with total capacity of 15,755MW as at end-September 2022.

MARC last year equalised TPGSB’s rating to TNB’s AAA/stable rating, based on the significant financial and operational linkages between the two entities.

The joint lead managers and book runners for the sukuk issuance were CIMB Investment Bank Bhd and Maybank Investment Bank Bhd.

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TNB , TNBPowerGeneration , sukuk , subscription , loans , tenor


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