PETALING JAYA: MARC Ratings has affirmed its AAA-IS rating on TNB Power Generation Sdn Bhd’s (TPGSB) sukuk wakalah programme of up to RM10bil with a stable outlook.
In a statement, the credit rating agency said TPGSB’s rating is aligned with that of its parent Tenaga Nasional Bhd
’s (TNB) (AAA/stable) role as a key player in the energy generation sector and its strong operational and financial linkages.
According to MARC Ratings, as of Sept 1, 2025, TPGSB accounted for 55.3% of Peninsular Malaysia’s installed capacity.
“It also benefits from stable earnings, supported by long-term and availability-based power purchase agreements (PPAs) with TNB. These contracts mitigate demand risk and allow for fuel cost pass-through contingent on operational performance,” the agency noted.
For the first half of 2025, TPGSB’s revenue dropped year-on-year to RM9.8bil mainly due to SJ Gelugor’s PPA expiry and lower energy payments from weaker coal prices.
The PPA for SJ Gelugor and SJ Putrajaya had expired, while SJ Tuanku Jaafar (703MW) is set to expire in August 2028.
All three were approved for extension in November 2025 under the new generation capacity programme and will remain operational from 2027 to 2029.
However, for the full year, revenue is expected to remain stable.
“Pre-tax profit is projected to exceed that of the prior year, supported by reduced capacity payment losses following the rectification of TNB Janamanjung’s forced outage, and lower coal commercial losses amid stable coal prices,” MARC Ratings said.
Furthermore, planned capacity restoration under the the hydro life extension programme (HLEP) and the NGC is expected to sustain revenue, while new projects such as the Nenggiri hydro plant will drive medium-term growth.
“Based on ongoing projects – the Nenggiri hydro plant and Sungai Perak Power Station HLEP, borrowings are projected to peak at about RM22.8bil in 2027, but total borrowings are expected to remain manageable,” it added.
