RAM Ratings has assigned a long-term preliminary rating of AA2/Stable to Solarpack Suria Sungai Petani Sdn Bhd's (3SP, the Company) proposed ASEAN Green SRI Sukuk Wakalah of up to RM305 mil (2023/2043) (Proposed Sukuk). Proceeds from the Proposed Sukuk will be utilised to refinance the bridging loan taken to fund the Plant's construction. The rating considers a one-off issuance of RM285 mil. The Company's Green Sukuk Framework was also reviewed by RAM Sustainability Sdn Bhd.

3SP is an independent power producer (IPP) with a 21-year power purchase agreement (PPA) with Tenaga Nasional Berhad (TNB), awarded under Malaysia's Large-Scale Solar 3 (LSS 3) Scheme. The Company is contracted to design, construct, own, operate and maintain a 90.88MWac solar photovoltaic (PV) plant (the Plant) in Sungai Petani, Kuala Muda, Kedah. The Plant achieved commercial operations on 8 March 2022.

3SP is 51:49 owned by JKH Renewables Sdn Bhd (JKH) and Solarpack Asia Sdn Bhd (Solarpack Asia), as per the Energy Commission's shareholding requirement for LSS projects. The terms of the tripartite Shareholders' Agreement between 3SP, JKH and Solarpack Asia and the sukuk financing however, provide that Solarpack Asia retains management and operational control of 3SP. Solarpack Asia's control of 3SP is further evidenced by the accounting consolidation of 3SP in the former's books despite it not being a majority shareholder. Solarpack Asia is a wholly-owned subsidiary of Solarpack Corporaci?n Tecnol?gica, S.A.U. (Solarpack CT), an experienced Spanish solar PV power plant developer and owner. Solarpack CT, established in 2005, has developed more than 1GW of solar plants and owns 17 generating plants in Spain, Chile, Peru and India, with a combined capacity of 671 MW. 

The preliminary rating reflects 3SP's sound project fundamentals, underscored by favourable PPA terms. As with other solar projects, 3SP faces minimal demand risk as TNB (Sukuk rated AAA/Stable by RAM) is required to purchase