RAM Ratings affirms reNIKOLA Solar II's AA2 sukuk rating

RAM Ratings has affirmed the AA2/Stable rating of reNIKOLA Solar II Sdn Bhd's (reNIKOLA Solar II or the Issuer) RM390 mil ASEAN Green SRI Sukuk Programme (2023/2041).

The rating affirmation reflects the transaction's strong debt coverage metrics, underpinned by healthy energy generation and cashflow from the two 30MWac solar photovoltaic (PV) plants (the Plants) owned by the project companies, RE Kuala Muda Sdn Bhd (REKM) and RE Machang Sdn Bhd (REMC). Demand risk is minimal as output is purchased by offtaker Tenaga Nasional Berhad (issuances rated AAA/Stable by RAM), at pre-specified energy rates, up to a maximum limit under their power purchase agreements (PPAs).

Both plants continued to record high availability in 2025 and 1H2026, with minimal outages. Kuala Muda generated 60,652MWh in 2025 and 31,803MWh in 1H2026, exceeding both management's projections and our sensitised assumptions, supported by favourable irradiance. While inclement weather constrained Machang's energy output, its generation of 64,616MWh in 2025 remained largely in line with our sensitised expectations. Output rebounded to 36,868MWh in 1H2026, putting the plant on track to outperform both management's projections and our sensitised expectations for the year. Generation at both plants remained comfortably above the minimum requirements under their PPAs, with full year generation expected to improve from 2025 due to the Super El Ni?o phenomenon which may see higher forecast irradiance conditions.

Under our sensitised cashflows, which incorporate lower energy generation and higher operating expenditure, reNIKOLA Solar II is projected to maintain minimum and average annual post-distribution finance service coverage ratios of 1.65 times and 1.94 times, respectively, over the Sukuk's remaining tenure, supportive of its AA2 rating. The transaction nonetheless remains exposed to solar irradiance variability, regulatory changes and f