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RAM Ratings affirms Cenergi’s AA3/Stable/P1 ratings
Published on 15 Oct 2026.
RAM Ratings has affirmed Cenergi SEA Berhad’s (Cenergi) AA3/Stable/P1 corporate credit ratings, along with the AA3/Stable rating of its Senior Sukuk and A2/Stable rating of its Subordinated Perpetual Sukuk under its RM1.5 bil Senior Sukuk/Subordinated Perpetual Sukuk Programme. The Subordinated Perpetual Sukuk is rated two notches below the Senior Sukuk, reflecting its subordinated ranking and the higher loss severity risk relative to senior financing obligations, should the instrument be issued.
The ratings incorporate parental uplift from UEM Group Berhad (UEM or the Group; senior debt rated AAA(s)/Stable), reflecting our view of a ‘moderate’ likelihood of extraordinary support from the Group. This is underpinned by Cenergi’s strategic importance in advancing UEM’s renewable energy (RE) agenda and UEM’s indirect ownership through UEM Lestra Berhad’s 92.86% stake in Cenergi. Given UEM Lestra Berhad’s relatively recent establishment and evolving track record, we believe that any financial support for Cenergi would ultimately stem from UEM. Cumulative equity support stood at RM161.5 mil since Cenergi was brought under UEM's stewardship in 2023.
On a standalone basis, Cenergi’s credit strength reflects its established presence in Malaysia’s RE sector as the market leader in the biogas industry with an estimated 22% market share (55.8 MW awarded capacity) as at end-June 2026. As the largest grid-connected palm oil mill effluent biogas operator under Malaysia’s Feed-in-Tariff (FiT) scheme, Cenergi enjoys relatively stable cashflow generation backed by long-term power purchase agreements, reasonable tariffs, priority of dispatch, and manageable operating requirements. The Group’s market leadership is reinforced by its proven operational track record and execution capabilities, while its strategic focus on the solar and mini hydro segments following the impending divestment of its biomass pellet business should further strengthen its positioning within Malaysia’s RE sector.
Despite its biogas leadership, Cenergi’s scale and financial profile remain modest. Following the completion of the 45.0 MWp Kuala Ketil solar farm and the 3.3 MW Sungai Suih mini hydropower project, Cenergi’s total RE capacity increased to 128.8 MW. This is expected to increase further to 175.9 MW upon completion of the upcoming mini hydropower project at Perak (3.0 MW), KLIA Aeropolis Solar Park (36 MWp) projects. Growth momentum is limited by regulatory FiT quotas while feedstock supply volatility could affect biogas plant performance. The Group’s recent diversification into mini hydro and biomethane broadens its RE portfolio, although its relatively limited track record in these segments presents operational risks. Hefty upfront capital expenditure, unexpected operational challenges or lower-than-expected yields may weigh on its financial profile, as demonstrated by the underperformance of its biomass pellet segment.
Cenergi’s operating revenue increased to RM107.7 mil in FY Dec 2025 (+19%, FY Dec 2024: RM90.5 mil) supported by contributions from nine newly commissioned plants. However, the Group registered pre-tax losses of RM58.8 mil due to hefty impairment losses in relation to the pellet business and its Indonesian biogas plant, as well as high depreciation and financing costs. Although Cenergi returned profitable in 7M FY Dec 2026, its performance until FY 2028 may be impacted should the operating losses from the biomass pellet business continue, while we note that plans are in place for exiting the business. Meanwhile, adjusted gearing ratio is projected to peak at 1.44 times at end-2026, while adjusted funds from operations debt coverage ratio is expected to average 0.17 times between 2026-2028. While these metrics remain supportive of the current rating, gearing headroom is expected to be limited relative to the 1.60 times sukuk covenant threshold, underscoring the importance of continued shareholder support.
Analytical contacts
Lee Jo Yee
(603) 2708 8261
joyee@ram.com.my
Chong Van Nee, CFA
(603) 2708 8210
vannee@ram.com.my
Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my
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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