RAM Ratings assigns final AA2 rating to Edra Solar’s ASEAN Sustainability SRI Sukuk

Published on 04 Oct 2019.

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RAM Ratings has assigned a final AA2/Stable rating to Edra Solar Sdn Bhd’s (the Company) RM245 mil ASEAN Sustainability SRI Sukuk (2019/2037) (the Sukuk) – the first such sukuk in Malaysia.

Under a 25-year Power Purchase Agreement (PPA) with Tenaga Nasional Berhad, Edra Solar has been contracted to design, construct, own, operate and maintain a solar photovoltaic plant with a capacity of 50 MWac (the Plant or the Project) in Kuala Ketil, Kedah. The Project also incorporates a social element; Edra Solar has allocated a buffer zone surrounding the solar farm facility to the local community, for the cultivation of pineapples and/or other crops. Already in operation for seven months since 25 February 2019, the Plant had been completed ahead of the scheduled commercial operations date in the PPA and within budget.

The Sukuk, equivalent to 78% of the total project cost, is to partly refinance the shareholder’s loan that had been obtained to fund the construction of the Plant. Edra Solar is wholly owned by Edra Power Holdings Sdn Bhd (rated AA1/Stable/P1 by RAM) - Malaysia’s second largest group of independent power producer.  

In assigning the final ratings, RAM has reviewed all the relevant transaction documents and assumptions applied. We find them to be in line with our expectations when the preliminary ratings had been assigned (published on 6 September 2019). Please refer to our final rating rationale on Edra Solar for further details on the assigned ratings.

Analytical contact
Chong Van Nee, CFA
(603) 3385 2482

Media contact
Padthma Subbiah
(603) 3385 2577

The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.

RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.

Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.

Published by RAM Rating Services Berhad
© Copyright 2019 by RAM Rating Services Berhad


Rating Rationale

Ratings on Edra Solar Sdn Bhd