Scatec Solar issues largest green Islamic bond in ‘competitive’ deal

By Devika Patel

Knoxville, Tenn., Oct. 20 – Scatec Solar ASA has set records with its recent RM 1 billion sale of a green SRI sukuk.

“The Islamic bond is a first,” chief executive officer Raymond Carlsen said on the company’s third quarter earnings conference call on Friday.

“It’s the largest green Islamic bond ever issued in the world.

“I would say it’s fairly innovative and it’s competitive in terms of financing,” Carlsen said.

The company had $1.1 billion of cash at the group level at the end of the third quarter.

Scatec Solar had $176 million of free cash at the group level.

Consolidated EBITDA reached NOK 595 million, up from NOK 222 million last year.

On Oct. 6, the company said it secured RM 1 billion from a green SRI sukuk to wrap up financing on three solar photovoltaic power plants totaling 197 MW in Malaysia.

In December 2016, the company teamed up with a local consortium led by Itramas Corp. The partnership signed three 21-year power purchase agreements with Tenaga Nasional Bhd. for an investment totaling roughly RM 1.24 million.

Construction has already started and is expected to be completed within the next few months. The projects are located in Merchang, Jasin and Gurun and will cover more than 180 acres each. The plants are expected to generate 282,000 MWh of electricity per year and avoid about 210,000 tons of carbon emissions per year.

Scatec said it is investing RM 251 million through preference shares partly convertible to 49% equity ownership in the projects as well as ordinary preference shares, which will provide long-term stable cash flows once the plants are in full operation.

“We are very satisfied to reach this important milestone. Together with our partners, we have again demonstrated our wide-ranging expertise and we are now ready to build the largest solar energy portfolio in South East Asia,” Raymond Carlsen, chief executive officer of Scatec, said when announcing the sukuk.

CIMB Investment Bank Bhd. is the sole principal adviser and CIMB and Maybank are the joint lead arrangers and managers for the sukuk. CIMB Islamic Bank Bhd. is the Shariah adviser.

The bond was given an AA rating by the Malaysian Rating Corp. Bhd. and a dark green rating from the Center for International Climate and Environmental Research in Oslo.

Oslo, Norway-based Scatec builds, owns, operates and maintains solar power plants.

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