As Malaysia braces for power reforms, Tenaga mulls RM10b bond programme

KUALA LUMPUR (Nov 22): Malaysia’s state power company is considering setting up a RM10 billion (US$2.4 billion) Islamic bond program as it braces for electricity sector reforms.

Tenaga Nasional Bhd. asked banks to submit proposals for the sukuk program, according to people familiar with the matter, who asked not to be identified as the information is private.

Tenaga, the dominant power supplier across Peninsular Malaysia and Sabah state, is bracing for the government’s move to lower prices for consumers by opening up the retail electricity sector. The company is seeking to expand its renewable assets, with plans to increase such capacity to 1,700 megawatts by 2025, from 332 as of end-2018, local newspaper The Star reported Nov. 9, citing Chief Executive Officer Amir Hamzah Azizan.

The Kuala Lumpur-based electricity producer would use the proceeds from the planned sukuk program for capital expenditure, investments, refinancing and working capital, the people familiar said.

Discussions are still early and Tenaga may decide not to proceed with the plan. A representative for the company didn’t immediately comment when contacted on the matter.

Tenaga last tapped the domestic debt market in October 2017 when it sold 3.67 billion ringgit of Islamic bonds, part of a RM5 billion program started that same year.

Source: TheEdgeMarkets