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RAM Ratings affirms Edra Solar’s ASEAN Sustainability SRI Sukuk rating at AA2/Stable
Published on 12 Nov 2026.
RAM Ratings has affirmed the AA2/Stable rating of Edra Solar Sdn Bhd’s (Edra Solar or the Company) ASEAN Sustainability SRI Sukuk (2019/2037). The rating is anchored by the Company’s consistently strong cash flow generation, underpinned by its 50 MWac solar photovoltaic plant’s (the Plant) excellent operating performance and favourable offtake arrangement with Tenaga Nasional Berhad. Additional liquidity support is provided by facilities procured by its sole shareholder, Edra Power Holdings Sdn Bhd, to maintain the minimum balances required in the transaction's finance service reserve account.
Edra Solar’s Plant, located in Kuala Ketil, Kedah, maintained full availability throughout 2025 and 1H 2026. The Plant continued to outperform expectations in 2025, despite lower solar irradiance and electricity generation than in 2024. Net energy output (NEO) reached 86,229 MWh, exceeding RAM's sensitised projection by 14.7% and the minimum requirement under the power purchase agreement by 57.1%. In 1H 2026, NEO increased 6.1% y-o-y to 46,056 MWh, supported by better weather conditions. This positions the Plant to record stronger full-year generation in 2026.
Revenue and profitability remained resilient, although operating margins are expected to moderate over time amid rising maintenance and replacement costs. RAM's stressed case assumes opex and capex that is 10% higher than management's revised projections. Under this scenario, the minimum and average annual finance service coverage ratios (FSCRs) remain robust at 1.65 times and 8.51 times, respectively, compared with 1.90 times and 10.81 times under the base case. The elevated average FSCR is underpinned by stringent distribution covenants that preserve cash for upcoming debt obligations under the Sukuk's uneven amortisation profile. The Company is projected to generate sufficient surplus cash flow to make distributions totaling RM70.60 million over the Sukuk’s remaining tenure, including RM25.0 million of dividends planned for 4Q FY Dec 2026.
Liquidity remains strong. As at the latest sukuk repayment in October 2026, Edra Solar held RM64.72 million of cash reserves and benefitted from RM3.70 million of standby letters of credit, comfortably exceeding RM7.40 million of sukuk profits due within the next 12 months, with no scheduled principal repayments over the period.
Notwithstanding the recent benefits of favourable irradiance conditions, the transaction remains exposed to solar irradiance variability, adverse weather events, force majeure occurrences and regulatory changes inherent in utility-scale solar projects.
Analytical contacts
Chong Van Nee, CFA
(603) 2708 8210
vannee@ram.com.my
Lai Jing Wei
(603) 2708 8239
Jingwei@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
© Copyright 2026 by RAM Rating Services Berhad
