Applications & Installations

Scatec Solar closes financing on 197 MW in Malaysia

Norway’s Scatec Solar has wrapped up financing for three solar arrays it is developing in Peninsular Malaysia, by issuing a 1,000 million ringgit ($237 million) green Islamic bond. Construction has already started on the projects, which will be finished in the next few months.
Brian Publicover
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Brian Publicover
The 100 MW Nova Scotia solar park is being developed by Scatec Solar in the north of Nigeria | Image: Scatec Solar

The Oslo-based developer jumped into Malaysian utility-scale PV development last December, when it agreed to tie up on 197 MW of solar with a consortium led by Kuala Lumpur-based engineering firm ITRAMAS. They launched their partnership by signing three 21-year PPAs with utility Tenaga Nasional Berhad, with a total investment of roughly 1,235 million ringgit. The projects are being built in Merchang, Jasin and Gurun. Each array will span more than 180 acres.

“We appreciate the efforts made by Bank Negara Malaysia, the Securities Commission Malaysia and the World Bank Group in introducing the concept of the Green SRI Sukuk, as this made it possible to finance our project in a climate-friendly manner,” said Lee Choo Boo, group managing director of ITRAMAS, which signed the PPAs on behalf of its Malaysian consortium partners, MalTechPro and Cam Lite.

The Malaysian Rating Corporation Berhad (MARC) gave the green sukuk bond a AA rating, while the Center for International Climate and Environmental Research in Oslo rated the offering as “dark green.” CIMB Investment Bank Berhad (CIMB) and Malayan Banking Berhad served as the joint lead arrangers and managers for the green sukuk bond, which provide returns without accumulating interest. CIMB Islamic Bank Berhad acted as the Shariah advisor, according to an online statement.

Scatec Solar is investing 251 million ringgit through preferential shares partly convertible to 49% equity ownership in the projects, in addition to ordinary preferential shares. The company is serving as turnkey EPC provider for the projects and will provide O&M and asset management services following the conclusion of construction.

Earlier this month, Scatec Solar — which had a project backlog of 1.14 GW and a project pipeline of 745 MW at the end of the second quarter — sold 40% of a 162 MW solar project in Brazil to Norwegian oil producer Statoil. They also started a 50/50 joint venture to build and operate large-scale solar plants in the country.

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