KUALA LUMPUR: Pengurusan Aset Air Berhad (PAAB) has successfully issued RM720mil in Blue Sukuk through its special purpose vehicle, Pengurusan Air SPV Bhd, under the company’s existing RM2bil Islamic Commercial Papers Programme.
There was strong demand from institutional investors, with total orders of RM770mil, representing an oversubscription of 1.54 times against the initial issuance size of RM500mil.
According to PAAB, the Blue Sukuk issuance is the world's largest, positioning the company at the forefront of sustainable Islamic finance debt capital market for water infrastructure, under PAAB’s Sustainable Islamic Finance Framework (SIFF).
"The Blue Sukuk issuance reflects strong investors’ confidence in PAAB's credit strength, prudent financial management and long-term sustainable financing strategy, as well as PAAB’s commitment to transparency, accountability and governance of financial and operational practices towards sustainability agenda," said PAAB CEO Zulkiflee Omar in a statement.
“PAAB will continue to mobilise sustainable capital that reinforces Malaysia's position as a global leader in sustainable Islamic finance, while advancing water security for the future and play a pivotal role in supporting the nation's sustainable development agenda.”
The SIFF, Malaysia's first to incorporate Blue Finance features, was developed with Maybank Investment Bank Bhd as Sole Sustainability Structuring Adviser. It received a Platinum Sustainable Finance Rating, the highest tier awarded by RAM Sustainability, for its alignment with internationally recognised sustainable finance principles and global market best practices.
Maybank Investment Bank CEO Michael Oh-Lau said the issuance sets a new benchmark for financing sustainable water infrastructure. "It showcases the potential of blue finance to mobilise long-term capital for Malaysia's water infrastructure as well as in Asean," he said.
The proceeds of the issuance, which will be received by PAAB on Aug 3, 2026, which be utilised to finance a portfolio of Blue Eligible Projects identified under the SIFF.
These include, among others,Jernih Water Treatment Plant in Melaka, Tok Bali Water Treatment Plant in Kelantan, Non-Revenue Water (NRW) reduction projects in Negeri Sembilan, Kampung Barisan Water Treatment Plant in Negeri Sembilan, Water Distribution Pipelines Seremban Barat in Negeri Sembilan, Sungai Muda Water Treatment Plant in Pulau Pinang, Sungai Karangan Water Treatment Plant in Kedah and Sultan Iskandar Water Supply Scheme in Johor.
"The projects include the construction of new water treatment plants, balancing reservoirs, new & NRW reduction water pipelines, and related infrastructures to supply and improve access to safe and reliable water services.
"All projects financed under the Framework are assessed through a robust governance process to ensure alignment with internationally recognised sustainable finance principles and deliver measurable environmental benefits," said PAAB.
