RAM Ratings has upgraded from AA2/Stable to AA1/Stable the rating of UEM Group Berhad's (UEM or the Group) RM2.2 bil Islamic Medium-Term Notes (IMTN) Programme (2012/2042), issued through funding vehicle United Growth Berhad (United Growth). We have also assigned an AA1(s)/Stable rating to the proposed IMTN programme of up to RM7.0 bil under another funding vehicle, UEM Olive Capital Berhad (UEM Olive Capital), which is a wholly owned subsidiary of UEM. 

The upgrade reflects a stronger government support uplift, given a 'high' likelihood of extraordinary support (previously assessed to be 'moderately high') from Khazanah Nasional Berhad (Khazanah)  UEM's parent and Malaysia's sovereign wealth fund. 

RAM has changed our view in our assessment of UEM's role as a government-linked entity, and now deem it to be very important to Khazanah. The Group is seen as more integral to support the government's shift to a high-value green economy as outlined by the National Energy Transition Roadmap (NETR). Khazanah, as a champion of an integrated Renewable Energy (RE) Zone under the NETR, has identified UEM as its green investment vehicle. The Group will be tasked to attract investments in green sectors to deliver the fund's societal, strategic and financial mandates, drive Malaysia's decarbonisation agenda and upskill Malaysians in green sectors over the long term. Khazanah's ownership of its sustainable energy arm, Cenergi SEA Berhad (Cenergi), was recently consolidated under UEM's umbrella of companies. Cenergi's extensive related experience and capabilities as the biggest grid-connected palm oil mill effluent biogas provider under Malaysia's Feed-in-Tariff scheme, make it a valuable addition to the Group. 

In conjunction with the launch of the NETR, UEM signed a memorandum of understanding with several partners for the development of a 1 gigawatt solar photovoltaic (PV) plant and a RE industrial park. The plant will be an integral piece of the RE Zone  one of 10 fl