TNB unit to is­sue up to RM4­bil sukuk

The Star Malaysia - StarBiz - - News -

PETALING JAYA: The long-de­layed Project 4A power plant in Pasir Gu­dang, Jo­hor, is set to take off, with Te­naga Na­sional Bhd (TNB) an­nounc­ing a plan to raise funds for it.

The na­tional util­ity com­pany said its 51%owned South­ern Power Gen­er­a­tion Sdn Bhd (SPG) had pro­posed a sukuk is­suance to raise up to RM4­bil to part-fi­nance the 1,440 MW gas-fired com­bined-cy­cle power plant.

In a fil­ing with Bursa Malaysia, TNB said pro­ceeds from the sukuk is­suance would be used to fi­nance up to 80% of the to­tal project cost.

The sukuk would be based on the syariah prin­ci­ple of Wakalah Bi Al-Istith­mar. It would have a ten­ure of up to 20 years.

TNB had re­cently com­pleted the ac­qui­si­tion of a con­trol­ling stake in SPG from SIPP En­ergy Sdn Bhd – a pri­vate in­vest­ment ve­hi­cle owned by the Sul­tan of Jo­hor.

The project is es­ti­mated to cost about RM4.7bil.

SPG will con­struct, own, op­er­ate and main­tain the power plant, which is ex­pected to achieve its sched­uled com­mer­cial oper­a­tion on July 1, 2020.

“The project will en­hance TNB’s gen­er­a­tion ca­pac­ity and will give a pos­i­tive im­pact on TNB’s earn­ings, and in re­turn, will add longterm value for its share­hold­ers,” the com­pany said in a fil­ing on May 3.

TNB shares closed un­changed yes­ter­day at RM14.58.

The power plant project was ini­tially awarded to a con­sor­tium com­pris­ing SIPP En­ergy, YTL Power In­ter­na­tional Bhd and TNB through di­rect ne­go­ti­a­tion in May 2014, but the lat­ter two pulled out.

TNB, how­ever, re­turned in May this year to take a ma­jor­ity stake in SPG.

In the an­nounce­ment in May, TNB re­vealed that the plant, whose com­mer­cial oper­a­tion had been orig­i­nally sched­uled to start in June 2018, is ex­pected to start run­ning on July 1, 2020.

Rais­ing cap­i­tal: TNB’s 51%-owned South­ern Power Gen­er­a­tion has pro­posed a sukuk is­suance to part-fi­nance the long-de­layed Project 4A power plant in Pasir Gu­dang.

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