RAM Ratings reaffirms AA1/Stable rating of Teknologi Tenaga Perlis Consortium’s sukuk

Published on 16 Nov 2021.

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RAM Ratings has reaffirmed the AA1/Stable rating of Teknologi Tenaga Perlis Consortium Sdn Bhd’s (TTPC or the Company) RM835 mil Sukuk Murabahah (2013/2023). 

The rating reflects TTPC’s sturdy business profile, which is underscored by the favourable terms of the Company’s power purchase agreement (PPA) with its sole offtaker, Tenaga Nasional Berhad (TNB). The commendable operating track record of the Company’s power plant and its robust debt servicing ability further support the rating. 

TTPC owns and operates a 650-MW combined-cycle gas turbine power plant in Kuala Sungai Baru, Perlis (the Plant), under a 21-year PPA with TNB which will expire on 31 March 2024. Jati Cakerawala Sdn Bhd (Jati) and TNB have respective 80% and 20% stakes in the Company.

TTPC has operated within the performance limits of the PPA, earning full available capacity payments since the Plant’s commissioning. The Company has also managed to fully pass through fuel costs to TNB as a result of the Plant’s efficiency. The Plant recorded an unscheduled outage rate (UOR) of 0.9% for the first nine months of calendar year (CY) 2021, against the PPA’s limit of 6% (CY 2020: 2.2%), and is on track to fulfil the availability target requirement of 94.69% for the sixth contract year block (2019-2021).

Our sensitised cashflow projections indicate that TTPC will generate an annual pre-financing cash flow of about RM152 mil, registering strong minimum and average annual finance service coverage ratios of 1.80 times and 1.88 times (with cash balances, post distribution and calculated on principal and profit payment dates) in the final two years of the Sukuk’s tenure. TTPC also supports Jati’s RM540 mil Sukuk Murabahah (2013/2023) (rated AA3/Stable) via dividend distributions. Our cashflow analysis assumes that the Company will optimise dividend distributions while adhering to its covenants on a forward-looking basis as opposed to only in the year of assessment.

Like other independent power producers, TTPC is exposed to force majeure and regulatory risks. The Company’s comprehensive array of insurance policies mitigate these risks but the timeliness of insurance payouts would be key to minimising any cashflow disruption. As an essential service provider, TTPC’s operations have stayed largely unaffected by movement restrictions during the Covid-19 pandemic.


Analytical contacts
Lee Jo Yee
(603) 3385 2583

Chong Van Nee, CFA
(603) 3385 2482


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
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