MARC Ratings has affirmed its AA-_IS rating on Sinar Kamiri Sdn Bhd’s RM245 million Green Sustainable and Responsible Investment (SRI) Sukuk Wakalah with a stable outlook. Sinar Kamiri is a special purpose project company that owns and operates a 49MWac solar power plant in Sungai Siput, Perak.

The rating is primarily driven by Sinar Kamiri’s 21-year power purchase agreement (PPA) with Tenaga Nasional Berhad (TNB) under which demand risk is insulated as the national power company will purchase the energy generated by the plant at a fixed tariff. The rating is moderated by the risk of variability in solar irradiance which determines the amount of energy generated, and performance risks associated with the plant operations. In 2021, electricity generation was lower than the P90 projection by 0.80% due to lower-than-projected irradiance. Accordingly, Sinar Kamiri posted a marginally lower revenue of RM33.1 million against a projected RM34.2 million.

The company’s cash balance stood at RM28.4 million as at end-February 2022, which is more than sufficient to meet its upcoming sukuk repayment obligation of RM6.2 million in July 2022. Under the base case projections, the project is expected to achieve minimum and average financial service coverage ratios of 2.27x and 2.42x throughout the sukuk tenure. The projected cash flows can withstand moderate stress scenarios of up to 2.4% in plant unavailability, increase in operations and maintenance cost by 10%, and lower electricity generation under P99 estimates.