RAM Ratings has reaffirmed the AA1/Stable/P1 corporate credit ratings of Edra Power Holdings Sdn Bhd (Edra Power or the Group). The reaffirmation is premised on Edra Power's resilient concession-based power generating businesses, backed by long-term power purchase agreements (PPAs) with government-owned off-takers. Its operating entities maintained their commendable performance with minimal unplanned plant downtime and revenue deductions, underlining their robust dividend flows to Edra Power. The healthy dividend receipts anchor Edra Power's robust debt-servicing aptitude, although there are some concerns surrounding its pace of concession replacements. 

Edra Power is Malaysia's second largest independent power producer group (accounting for 9% of the nation's installed capacity by equity ownership), after Malakoff Corporation Berhad. With an aggregate equity capacity of 4.7 GW, the Group owns 11 operating power plants, mostly located in Malaysia. These plants have long operating track records, with some spanning 25 years. The Group is also developing South-East Asia's biggest combined-cycle gas-turbine (CCGT) power plant  a 2.2 GW facility in Melaka (held by 100%-owned Edra Energy Sdn Bhd). 

Sixty-one percent of Edra Power's power plant assets are scheduled to be retired by 2024, along with the expiry of their respective PPAs. These will only be partially compensated by Edra Energy's plant upon its expected completion in 2022 and potentially, a 660 MW greenfield CCGT project in Bangladesh (in which it has 88% of interests) subject to Edra Power's internal approval and the issuance of award from the Government of Bangladesh. Inability to replenish its portfolio with new projects may exert downward pressure on Edra Power's business profile, given its shrinking scale of operations which could diminish its cashflow visibility in the longer term. 

While Edra Power is actively pursuing several new projects, large-scale ventures into unfamiliar and less regulate