RAM Ratings assigns final AA3 rating to RP Hydro’s green sukuk of up to RM975 mil

Published on 13 Jul 2023.

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RAM Ratings has assigned a final AA3/Stable rating to RP Hydro (Kelantan) Sdn Bhd’s (RPHK or the Issuer) ASEAN Green SRI Sukuk of up to RM975 mil under the shariah principle of Wakalah Bi Al-Istithmar (2023/2043) (the Sukuk). In doing so, we have reviewed all relevant transaction documents and found them to be in line with our expectations when the preliminary rating was assigned in February 2023.

RPHK is jointly owned by Rising Promenade Sdn Bhd and Malakoff Corporation Berhad via its wholly owned subsidiary, Tuah Utama Sdn Bhd. The Issuer has since inked three 21-year Renewable Energy Power Purchase Agreements (REPPAs) with Tenaga Nasional Berhad, the sole offtaker for the generation and sale of electricity from three small run-of-river hydropower plants (the Plants or the Projects). The Plants are located in the districts of Kuala Krai and Gua Musang, Kelantan, having an aggregate installed capacity of 84 MW. The three plant sites in Kuala Geris (25 MW), Kemubu (29 MW) and Serasa (30 MW) are developed along Sungai Galas.

RAM’s final rating considers several updates in our assessment, including an increased issue size of RM975 mil compared to RM960 mil in the preliminary rating assessment, and revised construction timeline for the Projects, given the delay in financial close. The revised financial close date and corresponding Notice to Proceed with construction leave a potential 30-day gap between the scheduled feed-in tariff commencement date and the completion date guaranteed by the engineering, procurement, construction and commissioning contractors. Estimated liquidated damages payable under the REPPAs, although minimal, have been incorporated into the project cash flows.

Overall, we are satisfied that the transaction economics and credit metrics remain commensurate with an AA3/Stable rating. For more details and a complete analysis, please refer to our final rating rationale.


Analytical contacts
L Nurisya Abdullah
(603) 3385 2492

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 2023 by RAM Rating Services Berhad

Rating Rationale

Ratings on RP Hydro (Kelantan) Sdn Bhd