RAM Ratings has assigned a final AA3/Stable rating to Ranhill Solar Ventures Sdn Bhd's Sukuk Murabahah Programme of up to RM310 mil (2022/2042) (the Sukuk). In doing so, we have reviewed all relevant transaction documents and find them to be in line with our expectations when the preliminary rating was assigned (published on 15 August 2022). We also considered the construction progress of the underlying project since RAM assigned the preliminary rating and assessed the impact to the transaction's credit metrics given the revised financial close date.

Ranhill Solar Ventures was set up to raise financing for a greenfield 50 MW solar photovoltaic plant (the Solar Plant) owned by Ranhill Solar I Sdn Bhd and an operational 190 MW combined-cycle gas turbine power plant owned by Ranhill Powertron Sdn Bhd.

The Sukuk will be issued in three tranches, with an initial RM145 mil (Tranche 1) raised for the development cost of the Solar Plant in November 2022. Subsequent issuances  including Tranche 2, now deferred to a later date, and Tranche 3 (earlier projected in 2027)  remain contingent on several conditions, including confirmation that the sukuk rating will be maintained at a minimum of AA3. We expect to reassess the transaction's cashflow adequacy and debt servicing ability when details are made available to us then.

Construction progress of the Solar Plant stood at 21.62% as of end-September 2022, with earthworks at the main project site and piling works at the interconnection facilities having been completed. Although the contractor intends to push back the targeted completion date by three months to 30 September 2023, it is still viewed as achievable by the independent technical adviser and well within our stressed scenario, with project completion only by 31 March 2024.

Overall, despite these revisions, we are satisfied that the transaction economics and credit metrics remain commensurate with the final AA3/Stable rating assigned. For more details and com