Published on 29 Apr 2022.
RAM Holdings Berhad (RAM) sees the Sarawak state government’s plan to develop The Sustainable Sarawak Blueprint, announced on 29 March 2022, as a visionary and strategic move. “Sarawak is focused on three sources of clean green energy, namely hydropower, solar energy, and hydrogen. Hence, we are on the right track in improving the environment and moving to a more sustainable future. Sarawak hopes that environmental, social and governance (ESG) evaluation will be further introduced in the state, placing Sarawak among the world’s forerunners in such efforts,” highlighted Dr Hazland Abang Hipni, Sarawak’s Deputy Minister of Energy and Environmental Sustainability.
“Sarawak’s pioneering move will fit into the sustainable finance thrust being rapidly adopted by the Malaysian banking sector and capital markets, precipitating strong investors’ interest in Sarawak and continued interest in the Malaysian debt capital market which has been vital to funding long-term projects that have spurred the state’s economic progress,” said Chris Lee, RAM Holdings’ Group CEO and Executive Director.
Since 1993, RAM has cumulatively rated more than RM31 billion of bond and sukuk programmes from Sarawak-related issuers. Sarawak is also a pioneer issuer state in the ringgit and foreign-currency bond markets, through its various special-purpose vehicles. “RAM Ratings has observed through our long-standing and diverse credit rating engagements with both the Sarawak state government and state-related entities that good governance and transparency have been a common key feature,” adds Awang Za'aba Awang Mahmud, RAM Ratings’ CEO.
On 27 April 2022, Sarawak Petchem Sdn Bhd, which is jointly owned by Permodalan Satok Berhad and the Sarawak Economic Development Corporation, announced its proposed RM6 billion Sukuk Wakalah, rated AAA(s) by RAM. Sarawak Petchem was established to develop, construct and operate the first methanol plant in Bintulu, Sarawak, which is aimed at retaining the value chain of Sarawak’s oil and gas downstream activities. It is also expected to create economic and societal positive impacts through technology transfers, capacity training, product development and collaborations with local vendors through its proposed Vendor Development Programme that will link them to well-established global players in the industry.
In October 2020, Sarawak Energy Berhad – a leading RAM-rated entity – secured a RM100 million sustainability-linked revolving credit loan from a major Malaysian bank, making it the first utility company in the country and the first East Malaysian company to secure a loan linked to measurable sustainability performance targets. The loan is paired to Sarawak Energy’s commitment to keep its grid emission intensity in alignment with the Paris Agreement and its pledge to meet the objective of the ‘Business Ambition for 1.5°Celsius’ initiative. The facility will also keep Sarawak Energy on track to achieving its goal to fully electrify the state by 2025.
In line with the state’s stance and momentum on ESG transparency and its sustainability direction, Sarawak Petchem, which is associated with the fossil fuel sector, undertook a comprehensive independent ESG assessment, for which it was accorded a Silver3p (S3p) Project Sustainability Rating by RAM Sustainability today. “This is the first Sustainability Rating assigned to any Sarawak entity and establishes a foundation for other Sarawak state entities to emulate,” said Promod Dass, CEO of RAM Sustainability. In its rating exercise, RAM Sustainability rigorously analysed Sarawak Petchem’s sustainability performance based on all ESG and positive impact factors as well as due diligence meetings with the company’s management.
In 2016, RAM Ratings published Sarawak Focus, a publication detailing RAM’s established track record in rating prominent Sarawak entities, including those involved in the power, port, construction, property, manufacturing, plantation, oil & gas support services, financial services, and telecommunication sectors. In May 2022, RAM will publish Sarawak Focus 2.0 – The Sustainable Journey Ahead.
Subscribers can retrieve Sarawak Focus and the upcoming Sarawak Focus 2.0 – The Sustainable Journey Ahead at our website, www.ram.com.my. Non-subscribers may contact Ain at firstname.lastname@example.org or Faiez at email@example.com for a copy.