RAM Ratings: Sukuk the Main Funding Source for Malaysia’s Power Sector

As at the end of January 2020, outstanding Sukuk and conventional bonds in Malaysia’s power sector totalled MYR 65 billion, according to RAM Ratings. This accounted for 9% of Malaysia’s total outstanding corporate bonds.

With the five-year annual issuance averaging around MYR 8.4 billion between 2015-2019, Malaysia’s power sector is one of the most active sectors in the domestic bond market.

RAM Ratings stated that innovative financing structures have facilitated access to the Sukuk market, resulting in power Sukuk dominating total conventional bond issuances.

The power Sukuk market was supported by renewable energy projects i...