Monday, Mar 11, 2024
MARC Ratings has assigned a "Gold" Impact Assessment to Malaysia Rail Link Sdn Bhd’s (MRL) SDG Sukuk Framework. The framework has been established to set the guiding principles for MRL’s issuance of SDG Sukuk for specific eligible projects that contribute towards environmental and social benefits.
MRL, a special purpose vehicle company wholly owned by Malaysia’s Ministry of Finance (Incorporated), was established to manage, facilitate, undertake, and expedite the construction of the East Coast Rail Link (ECRL) project. MRL intends to raise RM10.21 billion from the SDG Sukuk programme via issuances of SDG Sukuk. The electrified railway project aims to link the east coast states of Kelantan, Terengganu, and Pahang to the Greater Klang Valley region. The 665-km rail network includes passenger and freight stations, interchanges, and port extensions, promising economic development and reduced travel times. Its rail alignment from Kota Bharu to the Integrated Transport Terminal Gombak is scheduled for completion by end-2026. Full completion from Gombak to Port Klang is expected by end-2027.
Proceeds raised from the issuance of SDG Sukuk will be channelled towards eligible projects under the following categories to address the respective United Nations Sustainable Development Goals (UN SDGs):
- Clean Transportation: UN SDG 11
- Energy Efficiency: UN SDG 7
- Pollution Prevention and Control: UN SDG 12
- Sustainable Management of Natural Resources: UN SDG 15
- Socioeconomic Advancement and Empowerment: UN SDG 8
- Affordable Basic Transport Infrastructure: UN SDG 11
MARC Ratings has assessed the framework and is satisfied that it 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.
In arriving at the framework’s Gold assessment, MARC Ratings opines that the impact of the Use of Proceeds is significant, with social and environmental benefits that support 5 of the 17 UN SDGs.
The full SDG Sukuk Framework Assessment can be accessed here.
Contact:
+603-2717 2963/ marc@marc.com.my