MARC Ratings has affirmed its AAAIS(bg) rating on Ranhill Sabah Energy II Sdn Bhd’s (RSEII) outstanding RM200.0 million Islamic Medium-Term Notes (IMTN) Programme with a stable outlook.
The rating reflects the unconditional and irrevocable guarantee provided by Bank Pembangunan Malaysia Berhad (BPMB), rated AAA/Stable by MARC Ratings.
RSEII owns and operates the 190MW combined-cycle gas turbine Rugading Power Station in Sabah under a 21-year power purchase agreement (PPA) with offtaker Sabah Electricity Sdn Bhd, a subsidiary of Tenaga Nasional Berhad.
Operating performance remained strong, with unplanned outages within the PPA-stipulated 4.0% limit, securing full capacity payments of RM69.1 million in 2025. The heat rate also met PPA requirements, enabling full cost pass-through to the offtaker, while energy payments amounted to RM123.0 million.
For the first half of financial year ended 30 June 2026 (1HFY2026), the group posted operating profit of RM8.5 million on revenue of RM66.4 million. RSEII’s cash balance of RM77.7 million as at end-February 2026 provides sufficient liquidity to meet the RM55.6 million principal repayment and profit payment due on 17 June 2026.
RSEII expects to incur additional capex of RM53.4 million over 2026–2028 for the gas turbine rotor life extension (RLE) programme, aimed at sustaining plant operability through to PPA expiry in 2032. This incremental capex is projected to result in cash flow shortfalls from 2027, to be addressed through the refinancing of the outstanding sukuk together with the RLE costs via a proposed RM260 million unrated sukuk by end-June 2026. Sukukholders’ interests remain protected by the BPMB guarantee.