KUALA LUMPUR: Malakoff Corporation Bhd, through its wholly owned subsidiary Malakoff Power Bhd (MPower) has issued its inaugural RM250 million Asean Sustainability SRI Sukuk Murabahah (Issuance) under its RM1.2 billion Islamic Medium-Term Notes Programme (IMTN).
This is Malakoff’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 shall be utilised to finance eligible projects by MPower, Malakoff and its subsidiaries, in accordance with Malakoff’s Sustainable Finance Framework, which has been in place since December 2023.
Maybank Investment Bank Bhd (Maybank IB) acted as the sole lead manager and facility agent while Maybank Islamic Bhd was the shariah adviser for the Issuance.
Maybank IB was also the sustainability structuring adviser for Malakoff’s Sustainable Finance Framework.
As part of its broader commitment to sustainability and energy transition, Malakoff in a statement yesterday said it has made significant strides over the past year in advancing its sustainability commitment.
The group achieved a 3.7% year on-year reduction in greenhouse gas emissions intensity moderately contributed as well by
a 17.0% reduction in Scope 2 emissions with respect to the Group’s electricity consumption.
It also launched its flagship Biomass Co-firing Project at the 2,100 MW Tanjung Bin Power Plant for a trial run under the National Energy Transformation Roadmap.
The project achieved a 2% biomass co-firing ratio.
Malakoff is committed to scale up the biomass co-firing to a higher ratio of 15% by 2027.
This milestone is projected to reduce carbon dioxide (CO₂) emissions by approximately 755,000 tonnes annually, which is equivalent to the carbon offset of 142 million mature trees.
In parallel, the group commenced construction of three run-of-river small hydropower plants along Sungai Galas in Kelantan, expected to offset a further 272,424 tonnes of CO₂ per year.
The group also continued expanding its renewable energy (RE) portfolio, achieving 173 MW in total RE capacity – a 496.6% increase from its 2021 baseline.
This includes 17.4 MWp of completed commercial and industrial solar installations and the acquisition of equity stakes in ZEC Solar Sdn Bhd (51%) and TJZ Suria Sdn Bhd (49%), contributing an additional 29 MW.
Malakoff managing director and group CEO Anwar Syahrin Abdul Ajib (pic) said: “This transaction marks a significant milestone for Malakoff Power, as it represents our first Asean Sustainability SRI Sukuk Murabahah issuance via a book-building exercise under our IMTN Programme.
“Given that MPower’s last public 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”.
On the back of growing demand for sustainability assets and the scarcity value of Sukuk offerings by MPower, the transaction was oversubscribed by 10.34 times.
Supported by the strong orderbook, the price guidance was revised and tightened multiple times.
The issuance was finally priced at MGS +70 basis points across both tenures of 7 and 10 years, which is 30 basis points lower than the upper end of the initial price guidance.
Maybank Investment Bank Bhd CEO Michael Oh-Lau said: “Maybank Investment Bank is proud to have lead-managed and advised Malakoff Power’s maiden Asean Sustainability SRI Sukuk Murabahah issuance, underscoring our commitment to be a sustainability leader in the region.
“The strong response from investors is testament of the market’s confidence in Malakoff as well as Maybank IB’s ability to secure strong participation despite market seasonality.
“The pricing outcome also positions this landmark transaction as one of the lowest spreads for a corporate within the AA-/AA3 rating band in recent times.”
