Malakoff unit issues RM250mil Asean Sustainability Sukuk
KUALA LUMPUR: Malakoff Corp Bhd's unit Malakoff Power Bhd (MPower) has issued its inaugural RM250 million Asean Sustainability SRI Sukuk Murabahah under its RM1.2 billion Islamic medium-term notes programme.
This marks the group's first sustainability offering under its Asean Sustainability SRI Sukuk Murabahah and the first by an independent power producer in Malaysia.
The proceeds from the issuance will be utilised to finance projects by MPower, Malakoff and its subsidiaries, in accordance with Malakoff's sustainable finance framework.
Malakoff managing director and group chief executive officer Anwar Syahrin Abdul Ajib said this is a significant milestone for MPower, as the group's last sukuk issuance was in December 2013.
"We are very encouraged by the strong demand from a diverse investor base for this issuance, which has set a new pricing benchmark for MPower. Looking ahead, Malakoff will continue to broaden its assets portfolio through strategic partnerships and circular economy initiatives.
"As a trusted partner in Malaysia's green transition, we remain focused on strengthening capabilities, enhancing efficiencies and delivering long-term value in an evolving energy landscape," he said in a statement.
The transaction was oversubscribed by 10.34 times, backed by growing demand for sustainability assets and the scarcity value of sukuk offerings.
Malakoff said the price guidance was revised and tightened multiple times, supported by the strong orderbook.
The issuance was priced at 70 basis points above the Malaysian Government Securities yield for both the seven- and 10-year tenures, which is 0.30 percentage point lower than the upper end of the initial pricing guidance.
Over the past year, Malakoff achieved a 3.7 per cent year-on-year reduction in greenhouse gas emissions intensity, partly supported by a 17 per cent drop in Scope 2 emissions related to the group's electricity consumption.
Its other notable sustainability commitments include its flagship Biomass Co-firing Project at the 2,100 megawatt Tanjung Bin Power Plant for a trial run under the National Energy Transformation Roadmap.
Malakoff is committed to scale up the biomass co-firing to a higher ratio of 15 per cent by 2027.
This is projected to reduce carbon dioxide emissions by approximately 755,000 tonnes annually.
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