RAM Ratings affirms RP Hydro's AA3/Stable sukuk rating 

RAM Ratings has affirmed the AA3/Stable rating of RP Hydro (Kelantan) Sdn Bhd's (RP Hydro) RM975 mil ASEAN Green SRI Sukuk (2023/2043). The affirmation reflects our view that the project's revised construction timetable remains within RAM's rating assumptions, supported by contractual revenue visibility under long-term renewable energy power purchase agreements (REPPAs) and adequate liquidity buffers to absorb construction-stage delays. 

The rating is underpinned by the strong expected cash flow from three run-of-river hydropower plants, backed by 21-year REPPAs with Tenaga Nasional Berhad (TNB, sukuk rated AAA/Stable/P1) as offtaker. These agreements provide a secure, fixed-tariff revenue framework once operations commence, although construction progress remains the key near-term rating constraint, alongside potential variability in generation output. 

As at 28 February 2026, overall project progress at the Kuala Geris (25 MW), Kemubu (29 MW) and Serasa (30 MW) plants in Kelantan stood at 62.6%, behind the scheduled 80.4%. The revised construction timeline reflects to an estimated eight-month delay from the August 2026 guaranteed completion date under the RM915 mil fixed-price, lump-sum turnkey EPCC contract. Nonetheless, the management's revised completion dates of February 2027 for Kemubu and Serasa, and April 2027 for Kuala Geris, remain within RAM's downside sensitivity assumptions and ahead of the 14 June 2027 feed-in tariff deadline. The stable rating outlook assumes no further material delays or cost overruns beyond available buffers. 

Delays stemmed mainly from earlier setbacks in authority approvals and access road construction, compounded by adverse weather, particularly affecting Kuala Geris and the transmission line alignment. The EPCC Contractors have implemented mitigation measures, including increased manpower deployment, double shift work arrangements and diversified equipment sourc