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Solarpack raises MYR285 million through issuance of a green bond facility in Malaysia

By Harmon

The facility has been utilised to refinance the existing bridge loan of Solarpack Suria Sungai Petani Sdn Bhd. (“3SP”) used for the construction of the 116MWp solar plant (“Plant”) being operated by Solarpack in Malaysia (“Project”)

Solarpack has raised MYR285 million through its project company, 3SP by successfully issuing an ASEAN Green SRI Sukuk Wakalah in accordance with the ASEAN Green Bond Standards, the Securities Commission Malaysia’s Sustainable and Responsible Investment Sukuk framework and the International Capital Market Association’s Green Bond Principles.

These Islamic notes comprise 38 semi-annual tranches with tenors ranging from 1 year to 19.5 years sculpted to match closely with the cashflow generation from the Project. Proceeds from the issuance have been utilised to refinance the bridge loan raised to fund the construction of the Plant. The facility has received a credit rating of AA2/Stable from RAM Rating Services Berhad while RAM Sustainability Sdn Bhd, which reviewed 3SP’s Green Sukuk Framework, has assigned a Tier-1 Environmental Benefit (EB) rating to the Project. Maybank Investment Bank Berhad (MIBB) acted as the Principal Advisor and Lead Arranger (PA/LA) while MIBB and CIMB Investment Bank Berhad (CIMB) acted as the Joint Lead Managers (JLMs) on the issuance.

This is a landmark transaction for Solarpack as it represents the first green project bond issuance by Solarpack allowing us to broad base the debt financing sources for our projects beyond the traditional loan market as we scale up.  The AA2 credit rating and the Tier-1 Environmental Benefit rating of the issuance underline Solarpack’s continuing commitment to highest standards of corporate governance and environmental improvement” said Aditya Kulshrestha, Head of Project Finance Asia and Africa for Solarpack.

Solarpack has recently been rated as the world's most sustainable utility according to the Sustainalytics ESG Risk Ratings. Moreover, the Spanish multinational has also recently published a Green Financing Framework to integrate its sustainability strategy into the company's financing policy. Solarpack aims to execute financial transactions that qualify as green financing for the amount of €1 billion by the end of 2023, to develop projects that generate a positive impact and accelerate the transition to clean and affordable energy for all, in line with its corporate purpose.