RAM Ratings has reaffirmed the AA3/Stable rating of Jimah Energy Ventures Sdn Bhd's (JEV or the Company) RM4.85 bil Senior Islamic Medium-Term Notes (IMTN) Facility (2005/2025). 

The reaffirmation is premised on the Company's sustained satisfactory operational performance and strong cashflow generation. JEV is an independent power producer (IPP) that owns and operates a 1,400 MW coal-fired power plant in Port Dickson, Negeri Sembilan (the Plant, comprising Unit 1 and Unit 2  700 MW each), under a 25-year Power Purchase Agreement (PPA) with Tenaga Nasional Berhad (TNB), the offtaker.

In 2021, the Plant continued to earn full Available Capacity Payments (ACPs) as its unscheduled outage rate1 (UOR1) was below the PPA limit of 6%. The peak-hour UOR2 surged above the permissible limit of 3.5% due to several incidents from May to July 2021, resulting in minor Daily Utilisation Payment (DUP) reductions. These were more than offset by bonus payments earned for the rest of the year. UOR2 improved in 7M 2022, enabling JEV to earn full DUPs in addition to full ACPs. The Company's average availability target (AT) for its third contract-year block was shy of the 91.0% threshold as a result of a several rectification overhauls in 2018 and a major overhaul in 2020. The AT penalty levied was immaterial at less than 0.1% of the Company's annual turnover. 

Despite operating marginally above the heat rate requirements of the PPA in certain months, JEV was able to fully pass on fuel costs to TNB in 2021. Rising fuel prices allowed the Company to earn a better fuel margin due to the time lag between procurement and the receipt of payment from the offtaker. As coal prices continued to escalate in 2022, JEV's fuel margin remained positive in 7M 2022. Heat rate breaches was observed in Unit 2 and the root cause of the breach is expected to be resolved during a major overhaul of the unit, scheduled for 1Q 2023.

The Company's net profit rose to RM475 mil in FY Dec 2021 (FY Dec 2