QUANTUM SOLAR PARK (SEMENANJUNG) SDN BHD - 2023 |
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| Report ID | 60538900469441 | Popularity | 413 views 112 downloads | |||||
| Report Date | May 2023 | Product | ||||||
| Company / Issuer | Quantum Solar Park (Semenanjung) Sdn Bhd | Sector | Infrastructure & Utilities - Solar | |||||
| Price (RM) |
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| Rationale |
Rating action MARC Ratings has affirmed its AA-IS rating on Quantum Solar Park (Semenanjung) Sdn Bhd’s (QSP Semenanjung) outstanding RM775.0 million Green Sustainable and Responsible Investment (SRI) Sukuk with a stable outlook. QSP Semenanjung owns three 50MW power plants located in Gurun, Kedah; Jasin, Melaka; and Merchang, Terengganu. Rationale The rating remains underpinned by the strength of QSP Semenanjung’s 21-year power purchase agreement with Tenaga Nasional Berhad (TNB), under which the national power company will purchase energy generated by its plants at a fixed tariff. This mitigates the company’s exposure to demand risk. The rating is moderated by the risk of significant variability in solar irradiance as well as performance risks associated with the plants’ operations. In 2022, energy generation from the Merchang plant surpassed its P90 projection by 4.00%, while energy generation was marginally lower than projections for the Gurun (-0.06%) and Jasin (-0.02%) plants due to lower solar irradiance. Collectively, total generation exceeded projections by 1.31%. Cash flow from operations (CFO) was in line with projections at RM113.7 million. QSP Semenanjung has built up a strong liquidity position with cash balances of RM186.2 million as at end-February 2023, which is more than sufficient to meet its RM100.1 million sukuk principal repayment and profit payment due in 2023. Under base case projections, QSP Semenanjung is expected to achieve minimum and average finance service coverage ratios (FSCR) of 2.06x and 2.50x. The projected cash flow can withstand moderate stress scenarios such as lower plant availability of 97.6%, a 10% increase in operations and maintenance cost or lower electricity generation under P99 estimates throughout the sukuk tenure. Rating outlook The stable outlook assumes that QSP Semenanjung’s plants will continue to meet P90 energy generation projections and not encounter significant operational issues. Rating trajectory Upside scenario The rating could be upgraded if the plants continue to record strong operating performance and are able to build up a strong liquidity buffer and reduce borrowings. Downward scenario Downward pressure on the rating would materialise if the plants’ performance falls substantially below expectations due to unforeseen events such that QSP Semenanjung’s debt service coverage metrics are significantly impacted. Key strengths
Key risks
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