TNB’s RM2 bil sustainability sukuk for Nenggiri dam oversubscribed by two times

April 3, 2023

KUALA LUMPUR (March 29): Tenaga Nasional Bhd (TNB)’s wholly-owned subsidiary TNB Power Generation Sdn Bhd (TNB Genco) has issued RM2 billion in sustainability sukuk wakalah to fund the development of the Nenggiri Hydroelectric Power Plant project in Kelantan.

In a bourse filing on Wednesday (March 29), the national utility giant said the issuance — upsized from its initial RM1.5 billion — was the second under its 30-year Sukuk Wakalah Programme of up to RM10 billion nominal value.

It was issued in four tranches: RM200 million with a tenure of seven years and periodic distribution rate of 4.3% per annum; RM600 million (10 years) at the rate of 4.58%; RM300 million (15 years) at 4.67%; and RM900 million (20 years) at 4.84%.

“The order book was oversubscribed by 2.02 times representing an order book size of RM4.04 billion against the issuance size of RM2 billion.

“This deal achieved a stronger order book from a broad range of investors of over 44 accounts, allowing the initial issue size of RM1.5 billion to be upsized to RM2 billion,” it said.

Proceeds raised will be utilised by TNB Genco to finance and/or refinance loans obtained for development costs related to the planning, design, engineering and construction of Project Nenggiri, according to the unit’s Sustainability Sukuk Framework.

Construction for the 300 megawatt (MW) hydroelectric dam is expected to take five years, with commercial operation date (COD) on June 1, 2027, according to reports.

TNB noted that the unit’s framework has been accorded a “Gold” rating by independent external reviewer MARC Ratings Bhd.

“This sustainability funding initiative by TNB Genco demonstrates its commitment to support TNB’s aspiration to achieve net zero emissions by 2050, a move towards decarbonisation and renewable energy,” the group added.

CIMB Investment Bank Bhd and Maybank Investment Bank Bhd were the joint lead managers and bookrunners of the RM2 billion sustainability sukuk wakalah.

Shares in TNB ended seven sen or 0.75% higher at RM9.40, giving the group a market capitalisation of RM54.08 billion.

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