reNIKOLA signs subscription deal for climate sukuk

From left: HLIB Group Managing Director/CEO Lee Jim Leng, reNIKOLA Holdings Managing Director Boumhidi Adel and MAIB Senior Director/Head of Debt Markets Che Puan Datuk Seri Diraja Nur Julie Gwee Ariff at the subscription agreement signing ceremony for the world’s first climate sukuk of RM390mil by reNIKOLA Solar II.

KUALA LUMPUR: Renewable energy company, reNIKOLA Holdings Sdn Bhd will be issuing its second Asean Green SRI Sukuk (reNIKOLA II Green Sukuk), which will also be the world’s first climate sukuk certified by the Climate Bonds Initiative (CBI).

In a statement, reNIKOLA said the sukuk will be issued via its wholly-owned subsidiary, reNIKOLA Solar II Sdn Bhd.

This is following the signing of a subscription agreement with joint lead managers Hong Leong Investment Bank Bhd (HLIB) and MIDF Amanah Investment Bank Bhd (MIDF).

“The reNIKOLA II Green Sukuk is rated AA2 with a ‘stable’ outlook from RAM Rating Services Bhd and is independently verified by RAM Sustainability Sdn Bhd to have complied with the Climate Bonds Standard and Certification Scheme, making it the world’s first climate sukuk certified by CBI.

“The proceeds from the issuance will be utilised mainly to refinance the development costs of two 30-megawatt solar plants in Kuala Muda, Kedah, and Machang, Kelantan.”

The company said the sukuk has garnered positive interests from a wide range of fixed-income investors, resulting in an oversubscription of nearly three times the issue size.

reNIKOLA managing director Boumhidi Adel said the sukuk will motivate the group to continue to lead in the area of green sustainable financing, with this being its second sukuk issuance in three years.

“Being the first sukuk in Malaysia certified by CBI to be 1.5°C transition pathway aligned has helped to enlarge and diversify our investor base, leading to the sukuk to be nearly three times oversubscribed.”

Meanwhile, HLIB group managing director and chief executive officer Lee Jim Leng said climate investment and green financing is a rapidly-expanding industry that should receive more support from financial institutions, especially in South-East Asia.

“The overwhelming support we received from our investors reveals that there is a wealth of interest and potential in the syariah-compliant climate investment market.

“This not only promotes the integration of sustainable practices across various industries but also provides a new avenue for business growth and innovation, creating a win-win situation for all stakeholders.”

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