TNB secures RM339m financing for Malaysia’s largest solar farm

PETALING JAYA: Tenaga Nasional Bhd (TNB) has secured RM339 million financing for Malaysia’s largest solar farm, located on a 97ha site in Mukim Tanjung 12, Kuala Langat, Selangor.

The national utility company, through its wholly-owned subsidiary TNB Sepang Solar Sdn Bhd (TSS) together with Affin Islamic Bank Bhd (Affin Islamic), has achieved financial closure for financing the project.

TNB vice-president (Energy Ventures), Datuk Nor Azman Mufti described the project as a booster to TNB’s aspirations in championing renewable energy (RE) in Malaysia.

“As many utility companies around the world are shifting towards RE, TNB also aspires to be the Asean leader in renewable energy by 2025,” he added.

Affin Bank managing director and CEO, Kamarul Ariffin Mohd Jamil said: “Affin Bank Group is proud to be partnering with TNB and TSS in embracing the government’s initiatives to pursue greater energy sustainability projects.”

The Solar Power Purchase Agreement (SPPA) for the project was inked in March 2017 between TNB and TSS. The latter, set up as a special purpose vehicle to undertake the project, was awarded the project by the Energy Commission through a competitive bidding exercise.

Under the 21-year SPPA, TSS would supply electricity to TNB, through the national grid from the 50MW (megawatt) LSS beginning its commercial operation date in November 2018.

Tenaga’s share price fell two sen to close at RM14.20 on Tuesday with some 7.93 million shares changing hands. It has a market capitalisation of RM80.36 billion.

Meanwhile, Malaysian Rating Corp Bhd has revised the rating outlook for TNB’s Kapar Energy Ventures Sdn Bhd’s (KEV) RM2 billion Sukuk Ijarah to stable from negative, on improved cash flow and stronger liquidity position. The sukuk has a AA+ rating.

KEV, a 60%-owned subsidiary of TNB, owns and operates Kapar Power Station (KPS), the largest domestic multi-fuel thermal power station with four generating facilities with a combined nominal capacity of 2,420MW.

The revision also considers the support recently extended by TNB, with the implementation of periodic resetting of KPS’ outage rates that has improved operational performance.