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

RAM Ratings has affirmed the AA₂/Stable rating of Edra Solar Sdn Bhd’s (Edra Solar or the Company) RM245 mil ASEAN Sustainability SRI Sukuk (the Sukuk), premised on the sound project economics of the Company’s 50 MWac solar photovoltaic plant (the Plant) in Kuala Ketil, Kedah.

Supported by the favourable terms of its power purchase agreement (PPA) with Tenaga Nasional Berhad (TNB, issues rated AAA/Stable by RAM) and sterling plant performance, Edra Solar continued to display a relatively stable revenue generation profile. This, along with the Sukuk’s stringent distribution covenants and a standby letter of credit procured by Edra Power Holdings Sdn Bhd (Edra Solar’s sole shareholder), underscores the Company’s strong debt servicing ability. 

The Plant generated a net energy output (NEO) of 88,729 MWh in 2024, outperforming our sensitivity projection and the declared annual quantity (DAQ) by 17% and 13%, respectively. In 1H 2025, NEO further surpassed its seasonally prorated 2025 DAQ by 5.4%. The Plant’s NEO remains significantly above the PPA minimum requirement of 70% of DAQ, with the outperformance mainly attributable to optimal weather conditions, the increased cleaning efficiency of PV panels from utilising automated robots, and 100% plant uptime.

As at the latest sukuk repayment date in October 2025, Edra Solar recorded a finance service coverage ratio (FSCR) (with cash balances) of 9.21 times, well above the minimum required FSCR of 1.65 times. In view of the staggered and uneven repayment profile, the Sukuk’s distribution covenants include the aggregate profit payments up to the next scheduled principal as well as the scheduled principal due. In this respect, management has confirmed its commitment to preserve the Sukuk’s coverage supportive of its rating. Even with permitted distributions under RAM’s sensitivity analysis, Edra Solar’s debt servicing capacity will stay robust over the Sukuk’s tenure, with minimum and average annual post-distribution FSCRs of 1.65 times and 8.87 times, respectively.

As with other solar farms, the Plant is exposed to solar irradiance variability, the inherent regulatory risks of a concession-based business, and force majeure or event risks, which are somewhat moderated by insurance policies, the Plant’s modular nature and vast site.  


Analytical contacts
Lai Jing Wei
(603) 2708 8239
jingwei@ram.com.my

Chong Van Nee, CFA
(603) 2708 8210
vannee@ram.com.my

Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my