RAM Ratings has reaffirmed the AA2/Stable rating of Edra Solar Sdn Bhd's (Edra Solar or the Company) RM245 mil ASEAN Sustainability SRI Sukuk (the Sukuk). 

The rating reflects the sound project economics of the Company's 50 MWac solar photovoltaic plant (the Plant) in Kuala Ketil, Kedah. The favourable terms of Edra Solar's power purchase agreement (PPA) with the offtaker  Tenaga Nasional Berhad (TNB, rated AAA/Stable by RAM)  and the Plant's robust operational performance underline the Company's sturdy debt coverage.

The Plant generated a total net energy output (NEO) of 89,028 MWh in 2021, outperforming our sensitised projection of 77,306 MWh (+15.2%) as well as the declared annual quantity (DAQ) of 78,400 MWh, i.e., the forecasted annual electricity output submitted to TNB in accordance with the PPA. The PPA requires the Plant to meet at least 70% of the DAQ for each contract year. The Plant's NEO for 5M 2022 (38,712 MWh) also surpassed its seasonally pro-rated 2022 DAQ by 7.8%.

The strong NEO is a reflection of high solar irradiance and superior plant availability of 99.66% in 2021, during which the Plant experienced only a cumulative 30 hours of unscheduled outages. The outages largely resulted from an external fault at the grid which tripped the outgoing feeder, impeding the Plant's ability to export electricity. In 5M 2022, the Plant achieved 100% availability with no outages.

In FY Dec 2021, Edra Solar's revenue and operating profit before depreciation, interest and tax stayed commendable at RM34.6mil (FY Dec 2020: RM34.5 mil) and RM28.5 mil (FY Dec 2020: RM29.0mil), respectively. With healthy net cash from operating activities and no major capital expenditure after the Plant's completion in 2019, Edra Solar's pre-financing cashflow remained positive at RM31.0 mil in fiscal 2021 (fiscal 2020: RM33.3 mil). As at the latest repayment date (in April 2022), the Company recorded a finance service coverage ratio (FSCR) (with cash balances) of 6.54 ti