MARC Ratings has affirmed its AA-_IS rating on UiTM Solar Power Dua Sdn Bhd’s outstanding RM82.0 million Green Sustainable and Responsible Investment (SRI) Sukuk with a stable outlook. UiTM Solar Power Dua owns and operates a 25MWac solar power plant in Pasir Gudang, Johor.

The rating reflects the strength of the 21-year power purchase agreement between UiTM Solar Power Dua and offtaker Tenaga Nasional Berhad (AAA/Stable), with demand risk allocated to the offtaker. The rating is moderated primarily by the continued underperformance in energy generation and unforeseen operational challenges.

During 1Q2025, energy generation decreased due to the temporary shutdown of one of the plant’s 10 box transformers (Transformer 10), following the detection of anomalous readings during scheduled maintenance. The shutdown was carried out to facilitate further inspection and essential rectification works, resulting in a reduction in average plant availability to approximately 90.9%. Transformer 10 was restored in mid-March 2025, with overall plant availability recovering to 99.6% by April 2025. Additionally, solar irradiance during the quarter was approximately 4% lower than projected, further contributing to the underperformance. As a result, total energy generation for 1Q2025 fell short of the P90 estimate by around 26%. For the full year 2024, energy generation was approximately 12% below the P90 estimate, mainly due to persistently lower-than-expected solar irradiance.

Under the rating case, projected energy generation has been revised downwards to reflect observed trends, with the pre-distribution finance service coverage ratio (FSCR) expected to remain above 1.5x through sukuk maturity, and average and minimum FSCR projected to be 2.6x and 2.1x. As of end-March 2025, designated accounts held RM8.9 million, following a RM5.0 million principal repayment; the next principal maturity of RM5.0 million is due in March 2026.