RAM Ratings affirms Edra Solar's ASEAN Sustainability SRI Sukuk rating at AA2/Stable

RAM Ratings has affirmed the AA2/Stable rating of Edra Solar Sdn Bhd's (Edra Solar or the Company) ASEAN Sustainability SRI Sukuk (2019/2037). The rating is anchored by the Company's consistently strong cash flow generation, underpinned by its 50 MWac solar photovoltaic plant's (the Plant) excellent operating performance and favourable offtake arrangement with Tenaga Nasional Berhad. Additional liquidity support is provided by facilities procured by its sole shareholder, Edra Power Holdings Sdn Bhd, to maintain the minimum balances required in the transaction's finance service reserve account.

Edra Solar's Plant, located in Kuala Ketil, Kedah, maintained full availability throughout 2025 and 1H 2026. The Plant continued to outperform expectations in 2025, despite lower solar irradiance and electricity generation than in 2024. Net energy output (NEO) reached 86,229 MWh, exceeding RAM's sensitised projection by 14.7% and the minimum requirement under the power purchase agreement by 57.1%. In 1H 2026, NEO increased 6.1% y-o-y to 46,056 MWh, supported by better weather conditions. This positions the Plant to record stronger full-year generation in 2026.

Revenue and profitability remained resilient, although operating margins are expected to moderate over time amid rising maintenance and replacement costs. RAM's stressed case assumes opex and capex that is 10% higher than management's revised projections. Under this scenario, the minimum and average annual finance service coverage ratios (FSCRs) remain robust at 1.65 times and 8.51 times, respectively, compared with 1.90 times and 10.81 times under the base case. The elevated average FSCR is underpinned by stringent distribution covenants that preserve cash for upcoming debt obligations under the Sukuk's uneven amortisation profile. The Company is projected to generate sufficient surplus cash flow to make distributions totalingo