KUALA LUMPUR: Tenaga Nasional Bhd’s (TNB) wholly-owned subsidiary TNB Power Generation Sdn Bhd (TPGSB) has issued RM1.5bil worth of sustainability sukuk wakalah.

       The Islamic bond was issued under its Islamic medium-term notes programme of up to RM10bil in nominal value.

       The programme, which has a 30-year tenure, is based on the syariah principle of wakalah bi al-istithmar.

       In a filing with Bursa Malaysia, the national utility company said the sukuk was issued in three tranches, comprising RM150mil (with a tenure of 10 years), RM750mil (15 years) and RM600mil (20 years).

       Periodic distribution rates for each of the tranches are 4.70%, 5.05% and 5.20% per annum, respectively.

       TNB said that at the peak of the book-building exercise, the RM1.5bil sustainability sukuk wakalah was oversubscribed by 3.41 times, with orders received amounting to an aggregate of RM5.1bil from over 30 accounts.

       “The proceeds from the issuance of sustainability sukuk wakalah will be utilised by TPGSB for the Nenggiri hydroelectric power plant project, as set out in the TPGSB Sustainability Sukuk Framework,” it said.

       It noted that the TPGSB Sustainability Sukuk Framework had been accorded a “gold” rating by MARC Ratings Bhd as the independent external reviewer.

       “This sustainability funding initiative by TPGSB demonstrates TPGSB’s commitment to support TNB’s aspiration to achieve net-zero emission by 2050, a move towards decarbonisation and renewable energy.

       “As a significant and wholly owned subsidiary of TNB, TPGSB will play an important role in supporting TNB’s sustainability aspirations and commitment in mitigating climate change by adopting greener, cleaner and more efficient power generation technology,” it said.

       For its first quarter ended March 31, 2022, TNB’s revenue grew 36.4% year-on-year (y-o-y) to RM15.66bil while net profit dropped 6.84% y-o-y to RM893.1mil.

       Earnings per share was 15.6 sen (versus 16.81 sen a year earlier).

       In its notes on its first-quarter performance, TNB said the jump in revenue during the quarter was mainly due to the under-recovery position of imbalance cost pass-through (ICPT) of RM3.5bil, compared to an over-recovery position of RM327.3mil a year earlier.

       Operating expenses during the quarter rose by 46.9% to RM13.43bil, mainly due to higher fuel price which was passed through the ICPT.

       However, the operating profit saw a slight increase of RM41.8mil, or 1.8%, due to lower net loss on impairment of financial instruments. Profit after taxation was lower by 10.5%, or RM102.3mil, mainly due to higher tax expenses.

       TNB said it will continue to take prudent measures in terms of its operational and financial requirements to ensure it remains resilient.

       “The group foresees a reasonable performance for the year 2022 with the implementation of the Regulatory Period 3, effective from Feb 1, 2022.

       “However, the group remains cautious on the prolonged increase in coal price and the impact from increased customer’s credit risk outlook.” — Agencies