TNB unit to issue up to RM4bil sukuk
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.