MARC Ratings has upgraded its rating on Leader Energy Sdn Bhd’s outstanding RM200 million ASEAN Green Sustainable and Responsible Investment Sukuk Wakalah to AAIS from AA-IS and revised the outlook to stable from positive.
Leader Energy is the investment holding company of two solar power project companies, Leader Solar Energy Sdn Bhd (LSE I) and Leader Solar Energy II Sdn Bhd (LSE II). Each company operates a solar power plant in Kuala Muda, Kedah, with a combined capacity of 49MWac.
The rating upgrade reflects the plants’ consistently strong operational performance since commencing commercial operations, resulting in financial metrics that have exceeded previous expectations. MARC Ratings expects the holding company to sustain financial metrics consistent with the current rating, underpinned by continued robust operational performance.
Leader Energy’s strong operational performance at LSE I and LSE II was driven by high plant availability and robust irradiance. From 2021 to 2025, availability averaged around 99% at both sites. Energy generation consistently outperformed P90 projections due to strong, stable irradiance, with 2025 output surpassing P90 by 14.7% at LSE I and 6.1% at LSE II, supported by favourable solar conditions in northern Malaysia.
Sustained outperformance versus P90 estimates has driven higher-than-expected revenue and cash flow, strengthening Leader Energy’s credit metrics. In 2025, revenue reached RM38.4 million, 12.0% above projections. As of end-2025, the finance service cover ratio (FSCR) was a robust 2.86x, well above the projected 1.93x. Revised cash flow forecasts anticipate an average FSCR of 2.75x for 2026–2037, with a minimum of 2.60x, compared to initial projections of 2.08x and 1.78x. Liquidity remains strong, underpinned by predictable operating cash flow averaging RM34.1 million annually over the past five years and a cash balance of RM39.0 million as of end-2025.
The rating also reflects the strength of LSE I and LSE II’s 21-year power purchase agreements with Tenaga Nasional Berhad (AAA/Stable) for up to a certain amount of solar power at a fixed tariff.