Nov 02 2011

Tenaga finally issues $1.6bn Sukuk

By Emmy Abdul Alim Malaysia's national utility company Tenaga Nasional Berhad has issued a 20-year RM4.9bn ($1.6bn) Sukuk to finance the construction of Southeast Asia's largest coal-fired power plant, a 1000MW project on the manmade island of Manjung situated off the northern state of Perak.

The Sukuk was priced at 3.8% to 4.9% and is offered in 16 tranches. The issue was awarded an AAA rating by Malaysian ratings agency RAM Ratings and attracted RM23bn ($7.5bn) worth of subscriptions.

Manjung houses three 700MW coal-fired plants but with Malaysia's increasing demand for electricity TNB has chosen to expand its facilities instead of buying power from Sarawak Energy as reported in Issue 22 of The Islamic Globe.

The €650m ($881m) construction project was awarded in April this year to a consortium comprising of French conglomerate Alstom and China Machinery Import and Export Corporation. Alstom also built TNB's existing Manjung facilities.

TNB recently posted a net profit of RM499.5m ($163m) down from RM3.2bn ($1.04bn) in the last financial year, citing higher fuel costs. They are in talks with the government and national oil company Petronas over the severe shortage of gas according to national news agency Bernama. Its worries will only ease in 2015 when the new plant is expected to be operational and powering up to 2m households.

TNB did not respond to a request for comment from The Islamic Globe.

© The Islamic Globe 2011

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