MARC has assigned a preliminary rating of AA-IS to Sinar Kamiri’s proposed Green SRI Sukuk Wakalah of up to RM245m. The outlook on the rating is stable.
Wholly owned by Mudajaya Group, SKSB was set up to undertake the development and operations of a greenfield solar power generation facility with a capacity of 49.0MWac in Sungai Siput, Perak. The estimated total development cost of the solar project is RM306m. The Sukuk proceeds will largely fund the project cost including the repayment of initial funding comprising a RM10m bridging loan and US$31m letter of credit facility. The Sukuk proceeds, together with RM61m in equity contribution, will translate to a finance-to-equity ratio of 80:20.
SKSB will supply solar power for a period of 21 years to Tenaga Nasional Berhadunder a solar power purchase agreement at a fixed tariff. MARC’s rating on the Sukuk primarily reflects the adequate projected cash flow coverage on the back of the energy payments from the offtaker TNB (AAA/Stable). The rating is also supported by the well-structured contract arrangements with respect to the engineering, procurement and construction as well as operations and maintenance of the solar power plant project. Moderating the rating are risks associated with project completion, solar irradiance estimates and overall plant performance.