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RAM Ratings affirms Manjung Island Energy’s AAA sukuk ratings
Published on 13 Nov 2026.
RAM Ratings has affirmed the AAA/Stable rating of Manjung Island Energy Berhad’s (MIEB) RM3.86 bil Islamic Securities (2011/2030) (Series 1) and the enhanced AAA(s)/Stable rating of its RM990 mil Islamic Securities (2011/2031) (Series 2).
The ratings are anchored by TNB Janamanjung Sdn Bhd (TNBJ or the Company), whose cash flows fully support MIEB’s sukuk obligations. Accordingly, RAM assesses both entities on a consolidated credit basis. MIEB is a special-purpose financing vehicle established to fund the construction of TNBJ’s 1,010 MW Generating Facility 2 (GF2), which operates alongside the Company's 2,070 MW Generating Facility 1 at the Sultan Azlan Shah Power Station in Perak (collectively, the Plants).
The affirmation of the Series 1 rating reflects TNBJ’s strong liquidity position and expected ability to maintain a robust debt-servicing capacity following the recent recovery in plant performance. Series 2’s enhanced rating continues to benefit from an unconditional and irrevocable corporate guarantee from parent company Tenaga Nasional Berhad (TNB, sukuk rated AAA/Stable by RAM).
Operational performance improved markedly from 2025 and in 1H FY Dec 2026, with lower unscheduled outage rates and a corresponding reduction in available capacity payment (ACP) losses. Both generating facilities recorded no ACP losses in 1H FY Dec 2026. While encouraging, the improvement remains relatively recent given the Plants' historical operational challenges, RAM will therefore continue to monitor the Plants’ long-term reliability.
As at end-June 2026, TNBJ maintained a substantial cash pile of RM2.23 bil, providing significant liquidity headroom against RM170 mil of financing obligations falling due over the next 12 months. Earnings have also normalised following the restoration of GF2’s operations and the overall reduction in ACP losses, with the Company registering pre-tax profits of RM195.57 mil in FY Dec 2025 and RM144.17 mil in 1H FY Dec 2026. With the financial impact of GF2's 2024 turbine incident largely behind it, we expect the Company to remain profitable, barring major operational disruptions or adverse fuel margin movements.
Under RAM’s sensitivity analysis – assuming continued ACP losses and higher operating expenses – indicates that MIEB would sustain post-distribution finance service coverage ratios of no less than 6.50 times throughout Series 1’s remaining tenure. This assessment assumes the Company preserves sufficient cash reserves for Series 2’s RM990 mil bullet repayment in November 2031, notwithstanding management’s indication that distributions via redeemable preference share redemptions may resume. Series 1 is further supported by standby letters of credit procured by TNB to meet finance service reserve account requirements.
Coal-fired power producers like TNBJ face increasing environmental and transition risks regulations, including potentially stricter emissions regulations, rising insurance costs and reduced access to funding as Malaysia advances its carbon reduction agenda.
Analytical contacts
Chew Chiang Lim
(603) 2708 8297
chianglim@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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