MARC upgrades QSP Semenanjung’s green Sri sukuk rating

KUALA LUMPUR: Malaysian Rating Corporation Bhd (MARC) has upgraded Quantum Solar Park (Semenanjung) Sdn Bhd’s (QSP Semenanjung) RM1 billion Green Sustainable and Responsible Investment (SRI) sukuk rating to AA-IS from A+IS.

The rating agency has concurrently revised the rating outlook to stable from positive.

“The upgrade incorporates the steady operational performance exhibited by QSP Semenanjung’s three 50MW solar power plants that is line with our expectations,” the ratings agency said in a statement.

“Actual energy production has been consistently higher than P90 estimates since the plants’ full commercial operation dates in

2019.

“As a result, revenue generation was 5.2 per cent higher than the projected RM136.8 million in 2020. Its finance service coverage ratio (FSCR) without cash of 1.47 times is in line with initial projections.”

MARC further said the strength of the project fundamentals remains underpinned by the 21year solar power purchase agreements entered into by each of QSP Semenanjung’s three project companies with Tenaga Nasional Berhad (AAA/Stable).

“The agreements mitigate demand risk. As one of the earliest players in the renewable energy segment, QSP Semenanjung has benefi ed from relatively higher tariffs,” it added.

“During 2020, there were no major operational issues; the plants’ performance ratios were between 77 and 79.4 per cent. QSP Semenanjung has sufficient liquidity, with cash balances of RM126.3 million as at end-2020 that can meet sukuk profit and principal repayments totalling RM100.4 million in 2021.

The project’s minimum and average pre-distribution FSCR with cash are forecast at 1.72 times and 2.10 times throughout the tenure of the sukuk, which MARC said was slightly higher than initial projections at the inception of the project.