Zul Rafique & Partners advises on Tenaga Nasional’s (TNB) issuance of Asean Green SRI Sukuk Wakalah valued at up to MYR1.05 billion (USD267 million) to finance the largest solar power plant in Malaysia and TNB’s largest renewable energy project to date.
TNB Kuala Muda Solar’s Asean Green Sustainable and Responsible Investment (SRI) Sukuk Wakalah is structured under the shariah principle of Wakalah Bi Al-Istithmar.
The firm counselled CIMB Investment Bank and Maybank Investment Bank, with the team led by partners Loh Mei Mei, head of the banking and finance practice group, and Jayden Chuah.
Chuah told Asia Business Law Journal that Zul Rafique & Partners primarily advised on “Malaysian securities laws for the issuance of unlisted capital market products under the Securities Commission Malaysia’s Lodge and Launch Framework, which includes the Capital Markets and Services Act 2007 and the various guidelines issued by the Securities Commission Malaysia”.
The transaction also features enhancement and liquidity support mechanisms for the project.
“The TNB group’s commitment is demonstrated by the issuer’s parent company, TNB Renewables (TRe), providing an undertaking to fund construction-phase liquidity shortfalls of up to 10% of total project costs through subordinated shareholder’s advances and/or equity subscriptions,” Chuah said.
“Additional liquidity support may also be provided to meet the issuer’s finance service reserve account and maintenance reserve account requirements via standby letters of credit and/or a corporate guarantee from TRe or an entity within the TNB group which has met the required rating requirements.”
The Asean Green SRI Sukuk Wakalah was structured under the Securities Commission Malaysia’s Sustainable and Responsible Investment Sukuk Framework, the AsSEAN Green Bond Standards, the International Capital Market Association’s Green Bond Principles and TNB’s Transition Finance Framework.
Issuance proceeds will finance the development, construction, operation and maintenance of a 500MWac large-scale photovoltaic facility in Kuala Muda, Kedah.
Chuah said Atlantic Blue, a subsidiary of Solarvest Holdings, would construct the solar power plant, while PESB Engineering will be responsible for the interconnection and substation components. Powertrack, a subsidiary of Solarvest, will operate the plant under a two-year operation and maintenance contract before TRe takes over.
