MARC Ratings has assigned a “Gold” Impact Assessment to TNB Power Generation Sdn Bhd’s (TPGSB) Sustainability Sukuk Framework that has now been expanded to encompass the development and operation of other renewable energy projects or assets, in addition to the Nenggiri Hydroelectric Power Plant Project.

TPGSB will issue Sustainability Sukuk from its existing Sukuk Wakalah Programme of up to RM10 billion established on April 5, 2022. It issued RM3.5 billion Sustainability Sukuk, proceeds of which were partly utilised for the Nenggiri Hydroelectric Power Plant Project as of May 31, 2024.

TPGSB is a wholly-owned subsidiary of Tenaga Nasional Berhad (TNB) and the power generation arm of TNB group. It owns, operates and maintains the majority of the group’s domestic power plants, including part of its renewable energy portfolio.

Further proceeds raised from the issuance of the Sustainability Sukuk will be channelled towards eligible projects under the Renewable Energy category to address six of the 17 United Nations Sustainable Development Goals (UN SDGs). These eligible projects include the Hydro Life Extension Programme of the Sungai Perak Hydroelectric Scheme Project.

We opine that the framework is aligned with the core components of the Sustainable and Responsible Investment Sukuk Framework of the Securities Commission Malaysia; the Green Bond Standards, Social Bond Standards, and Sustainability Bond Standards of the ASEAN Capital Markets Forum; and the Green Bond Principles, Social Bond Principles, and Sustainability Bond Guidelines of the International Capital Market Association, among others.

The Gold assessment of the framework reflects the view that the use of proceeds would provide relevant social and environmental benefits that support six of the 17 UN SDGs.