The upgrade incorporates the steady operational performance exhibited by QSP Semenanjung’s three 50MW solar power plants that is line with our expectations. Actual energy production has been consistently higher than P90 estimates since the plants’ full commercial operation dates in 2019. As a result, revenue generation was 5.2% higher than the projected RM136.8 million in 2020. Its finance service coverage ratio (FSCR) without cash of 1.47x is in line with initial projections.

The strength of the project fundamentals remains underpinned by the 21-year solar power purchase agreements entered into by each of QSP Semenanjung’s three project companies with Tenaga Nasional Berhad (AAA/Stable). The agreements mitigate demand risk. As one of the earliest players in the renewable energy segment, QSP Semenanjung has benefitted from relatively higher tariffs. During 2020, there were no major operational issues; the plants’ performance ratios were between 77.0% and 79.4%.

QSP Semenanjung has sufficient liquidity, with cash balances of RM126.3 million as at end-2020 that can meet sukuk profit and principal repayments totalling RM100.4 million in 2021. The project’s minimum and average pre-distribution FSCR with cash are forecast at 1.72x and 2.10x throughout the tenure of the sukuk, slightly higher than initial projections at the inception of the project.

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