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RAM Ratings affirms reNIKOLA Solar II’s AA2 sukuk rating
Published on 04 Nov 2026.
RAM Ratings has affirmed the AA2/Stable rating of reNIKOLA Solar II Sdn Bhd’s (reNIKOLA Solar II or the Issuer) RM390 mil ASEAN Green SRI Sukuk Programme (2023/2041).
The rating affirmation reflects the transaction’s strong debt coverage metrics, underpinned by healthy energy generation and cashflow from the two 30MWac solar photovoltaic (PV) plants (the Plants) owned by the project companies, RE Kuala Muda Sdn Bhd (REKM) and RE Machang Sdn Bhd (REMC). Demand risk is minimal as output is purchased by offtaker Tenaga Nasional Berhad (issuances rated AAA/Stable by RAM), at pre-specified energy rates, up to a maximum limit under their power purchase agreements (PPAs).
Both plants continued to record high availability in 2025 and 1H2026, with minimal outages. Kuala Muda generated 60,652MWh in 2025 and 31,803MWh in 1H2026, exceeding both management’s projections and our sensitised assumptions, supported by favourable irradiance. While inclement weather constrained Machang’s energy output, its generation of 64,616MWh in 2025 remained largely in line with our sensitised expectations. Output rebounded to 36,868MWh in 1H2026, putting the plant on track to outperform both management’s projections and our sensitised expectations for the year. Generation at both plants remained comfortably above the minimum requirements under their PPAs, with full year generation expected to improve from 2025 due to the Super El Niño phenomenon which may see higher forecast irradiance conditions.
Under our sensitised cashflows, which incorporate lower energy generation and higher operating expenditure, reNIKOLA Solar II is projected to maintain minimum and average annual post-distribution finance service coverage ratios of 1.65 times and 1.94 times, respectively, over the Sukuk’s remaining tenure, supportive of its AA2 rating. The transaction nonetheless remains exposed to solar irradiance variability, regulatory changes and force majeure events, in line with the inherent risks of utility scale solar projects.
We continue to monitor the ongoing arbitration between the project companies and the Plants’ engineering, procurement, construction and commissioning (EPCC) contractors in relation to the delivery-related disputes. Following the High Court’s lifting of the ad-interim injunction obtained by the EPCC contractors, RM66 mil of performance bond proceeds were released into the project companies’ Revenue Accounts. Pending resolution, these proceeds remain in the accounts. Given the protracted proceedings and uncertain outcome, we have not factored these monies as well as any outflows related to these proceedings in our analysis.
The issuer is wholly owned by reNIKOLA Holdings Sdn Bhd, which is in turn owned by reNIKOLA Sdn Bhd (55%) and B. Grimm Power Sdn Bhd (45%). Intercompany financing agreements between the Issuer, the project companies and the land companies (Kuala Muda Estate Sdn Bhd, Machang Estate Sdn Bhd and Machang Estate (II) Sdn Bhd, which own the project sites and receive land lease payments from the project companies) support timely servicing of sukuk obligations.
Analytical contacts
Neo Xue Wei, CFA
(603) 2708 8241
xuewei@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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