UITM SOLAR POWER SDN BHD - 2020
|Report ID||605259||Popularity||471 views 15 downloads|
|Report Date||Sep 2020||Product|
|Company / Issuer||UITM Solar Power Sdn Bhd||Sector||Infrastructure & Utilities - Solar|
MARC has affirmed its AA-IS rating on UiTM Solar Power Sdn Bhd’s (UiTM Solar) Green Sustainable and Responsible Investment (SRI) Sukuk of up to RM240.0 million. The rating outlook is stable.
The rating is mainly driven by UiTM Solar’s 21-year power purchase agreement (PPA) with Tenaga Nasional Berhad (TNB) under which the demand risk is largely eliminated as the national power company will purchase the energy generated by UiTM Solar’s 50MW solar photovoltaic plant at a fixed tariff. The rating is moderated by the variability risk in solar irradiance that would determine the amount of electricity generated. The stable outlook reflects MARC’s expectation that the plant will continue to maintain good operational performance and generate stable income streams.
Under the base case cash flows projection, the minimum and average financial service coverage ratio (FSCR) with cash stood at 2.88x and 5.39x throughout the sukuk tenure. The projected cash flow can withstand a moderate stress of 2.4% in plant outages and a 20% increase in operational costs.