[RAM] Rating update: Ranhill Solar I successfully achieves plant completion

Ranhill Solar I Sdn Bhd – the underlying cashflow source for Ranhill Solar Ventures Sdn Bhd’s Sukuk Murabahah Programme of up to RM310 mil (2022/2042) – reached the commercial operations date (COD) of its 50 MWac solar photovoltaic plant on 7 February 2024. We last affirmed the AA3/Stable rating of Ranhill Solar Ventures’ sukuk in November 2023.

During our last review, we assumed completion only by 31 March 2024 to cater for more frequent rainfall at year-end, a potential queue for testing and commissioning, and other unexpected events. We also assumed lower energy output and higher operating expenditure than the management’s base case post-completion. The earlier than projected plant commissioning allows the transaction to accrue more cash and cushion any initial operational hiccups. We expect Ranhill Solar Ventures’ debt servicing ability to remain strong with consolidated annual finance service coverage ratios of at least 1.50 times (with cash balances, post-distribution).

Despite this, the project delivery is beyond the power purchase agreement’s scheduled COD of 31 December 2023. Result of the application to the offtaker for an extension of time is still pending. Any delay liquidated damages shall be fully passed on to the external contractor. At present, management is still reconciling total project cost and expects no cost overruns. 


Analytical contacts
Chu Jia Ying
(603) 3385 2519
jiaying@ram.com.my

Chong Van Nee, CFA
(603) 3385 2482
vannee@ram.com.my

Media contact
Sakinah Arifin
(603) 3385 2500
sakinah@ram.com.my