KUALA LUMPUR: Tenaga Nasional Bhd’s (TNB) subsidiary has lodged a RM2 billion Islamic medium-term notes facility to finance the development of a hybrid hydro-floating solar project at Kenyir Lake, Terengganu.
The facility, known as the Asean Sustainability SRI Sukuk Wakalah, was lodged with the Securities Commission on Oct 30 by TI TNB Genco Solar Kenyir 1 Sdn Bhd.
TI TNB Genco is 70 per cent-owned by TNB Power Generation Sdn Bhd, a wholly owned subsidiary of TNB, while the remaining interest is held by Terengganu Incorporated Sdn Bhd through a joint venture arrangement.
The project involves the development of a 595-megawatt (MW) alternating current hybrid hydro-floating solar facility, supported by a 297MW/1,190 megawatt-hour battery energy storage system (BESS).
The facility is being developed under the Corporate Renewable Energy Supply Scheme (Cress), which enables renewable energy supply arrangements between generators and corporate consumers.
“The sukuk shall have a tenure of at least one year and up to 23 years from the date of issuance.
“The issuance of the Asean Sustainability SRI Sukuk Wakalah shall be made no later than 90 business days from the date of lodgement with the Securities Commission or such other extended dates approved,” according to TNB’s filing with Bursa Malaysia today.
The facility has received a preliminary rating of AA+IS with a stable outlook from MARC Ratings Bhd.
TNB said proceeds from the sukuk would be used to part-finance project development and construction costs, including engineering, procurement, installation, testing and commissioning.
The funds would also be used to reimburse existing shareholders’ advances related to project development, finance working capital and pre-operating expenses, as well as meet designated account requirements and facility-related expenses.
All proceeds will be utilised for Shariah-compliant purposes in accordance with the applicable sustainability and responsible investment frameworks.
The sukuk facility is aligned with the SC’s Sustainable and Responsible Investment Sukuk Framework, Asean green, social and sustainability bond standards, and the International Capital Market Association’s principles and guidelines.
It also falls under TNB’s Transition Finance Framework, dated Sept 24, 2024.
The SC’s Shariah Advisory Council endorsed the facility on July 6.
RHB Investment Bank Bhd is the principal adviser and lead arranger, while RHB Investment Bank and CIMB Investment Bank Bhd are the joint lead managers. RHB Islamic Bank Bhd is the Shariah adviser.