Scatec Solar closes financing for 197 MW in Malaysia
Scatec Solar ASA (SSO) and partners have achieved financial close for three solar PV power plants in Malaysia totaling 197 MW.
Financing for the plants has been raised through a successful issuance of the world’s largest Green SRI Sukuk (Islamic bond) of MYR 1,000 million in nominal value (USD 237 million).
In December 2016, Scatec Solar entered the Malaysian large-scale solar energy market by joining forces with a local ITRAMAS-led consortium that had signed three 21-year Power Purchase Agreements (PPAs) with the country’s largest electricity utility, Tenaga Nasional Berhad (TNB).
The partnership covers realization of the three solar plants totaling 197 MW with a total investment of about MYR 1,235 million (USD 293 million). Located in Merchang in the north-east, Jasin in the south and Gurun in the north-west of Peninsular Malaysia, the three power plants cover more than 180 acres each.
Scatec Solar invests MYR 251 million (USD 59 million) through preference shares partly convertible to 49% equity ownership in the projects as well as ordinary preference shares. Once the plants are in full operation they will provide long term stable cash flows. Scatec Solar will be the turn-key EPC provider for the projects and provide Operation & Maintenance as well as Asset Management services to the power plants.
“We are very satisfied to reach this important milestone. Together with our partners, we have again demonstrated our wide-ranging expertise and we are now ready to build the largest solar energy portfolio in South East Asia”, says Raymond Carlsen, CEO of Scatec Solar.
Construction of the plants have already started and is expected to be completed within the next few months.
Headquartered in Kuala Lumpur, ITRAMAS Corporation Sdn Bhd, a Malaysian engineering company with 17 years experience in green technology, is the lead sponsor of the three solar projects and signed the PPAs on behalf of the local consortium that includes two other Malaysian companies, MalTechPro and Cam Lite.
“This milestone marks a new beginning for Malaysia’s renewable energy sector. The projects are envisaged to generate up to 3,000 local jobs and will generate electricity for up to 93,000 households per year”, says Lee Choo Boo, Group Managing Director of ITRAMAS Corporation Sdn.
Mr. Lee further adds: “We appreciate the efforts made by Bank Negara Malaysia, the Securities Commission Malaysia and the World Bank Group in introducing the concept of the Green SRI Sukuk, as this made it possible to finance our project in a climate-friendly manner”.
The solar projects are expected to generate 282,000 MWh of electricity per year and avoid about 210,000 tons of carbon emissions per year, taking Malaysia closer to achieving its promised emission cuts under the Paris Climate Agreement.
The MYR 1,000 million Green SRI Sukuk was given an AA-rating by the Malaysian Rating Corporation Berhad (MARC) and a ‘dark green’ rating from CICERO – The Center for International Climate and Environmental Research in Oslo. CIMB Investment Bank Berhad (CIMB) is the sole principal adviser and both CIMB and Maybank are the joint lead arrangers and joint lead managers for the Green SRI Sukuk. CIMB Islamic Bank Berhad is the Shariah adviser for the Green SRI Sukuk.
Image Source: Scatec Solar ASA