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

Published on 20 Dec 2022.

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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 well within the performance limits of the PPA, earning full available capacity payments since the Plant’s commissioning. The Company 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 of 1.79% for the first nine months of calendar year (CY) 2022, against the PPA’s limit of 6% (CY 2021: 0.76%). The Plant is also on track to fulfil the availability target requirement of 93.54% for the seventh and final contract year block (2022-3M 2024).

Given its operational excellence, TTPC’s robust liquidity indicates that it will achieve a finance service coverage ratio of 2.19 times on the upcoming sukuk repayment date in January 2023 and comfortably meet the finance service reserve account requirement for its final sukuk obligations in July 2023. TTPC also supports Jati’s RM540 mil Sukuk Murabahah (2013/2023) (rated AA3/Stable) via dividends, which are subject to the distribution covenants under the Company’s RM835 mil sukuk.  

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. 


Analytical contacts
Zachary Tan
(603) 3385 2612

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.

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

Published by RAM Rating Services Berhad
© Copyright 2022 by RAM Rating Services Berhad

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