RAM Ratings reaffirms Tenaga’s AAA/Stable ratings
KUCHING: RAM Ratings has reaffirmed the respective AAA/ Stable ratings of Tenaga Nasional Bhd’s ( TNB) US$ 500 millionequivalent Murabahah MTN Programme ( 2005/ 2025) and RM5 billion Islamic MTN Sukuk Wakalah Programme (2017/2067) (Sukuk Wakalah).
The reaffirmations were premised on the group’s strategic position as Malaysia’s national electricity company and its continued strong performance.
“Based on RAM’s rating methodology for government-linked entities, TNB is highly likely to receive extraordinary government support in the event of financial distress, given its role that is deemed critical to the nation and the Group’s very strong relationship with the government.
“Besides its near-monopoly on the transmission and distribution of electricity across Peninsular Malaysia and Sabah, TNB has remained a dominant player in the domestic power- generation business, controlling 56 per cent of the peninsula’s generating capacity as at end-August 2017 – this is expected to increase to approximately 62 per cent by 2020.”
RAM said the group further plays a crucial role as the sole off-taker of generating capacity and electrical energy produced by independent power producers in Peninsular Malaysia.
The government, on top of its special share in TNB, currently owns an aggregate 62 per cent stake in the Group, together with various government agencies.
In line with rising fuel prices, TNB’s base tariff for the second regulatory period (2018-2020) under the incentive-based regulation (IBR) mechanism has been revised upwards.
“However, there had ultimately been no change in tariffs paid by consumers due to a 1.80 sen/kWh rebate for the January- June 2018 period. Turn to Page B2, Col 6