KUALA LUMPUR (May 6): Malakoff Corp Bhd (KL:MALAKOF) said on Tuesday it has raised RM250 million from the issuance of green Islamic bonds to finance certain projects.

The maiden Asean Sustainability SRI Sukuk Murabahah was issued under a RM1.2 billion Islamic medium-term notes programme, the company said in a statement. The issuance was also the first of such transaction by an independent power producer in Malaysia, it noted.

“We are very encouraged by the strong demand from a diverse investor base for this issuance” seen during the bookbuilding, said Malakoff chief executive officer Anwar Syahrin Abdul Ajib.

The offering was oversubscribed more than 10 times and priced at 70 basis points above the comparable Malaysian Government Securities across both tenures of seven and 10 years. The final pricing was also 30 basis points below the upper-end of the marketing range.

The issuance comes as Malakoff expands its renewable energy portfolio and embarks on an emission reduction programme.

Malakoff has initiated a trial run of its flagship co-firing biomass project at the 2,100-megawatt Tanjung Bin Power Plant under Malaysia’s National Energy Transition Roadmap.

The plan is to raise the co-firing ratio to 15% by 2027 from 2%, which Malakoff hopes would reduce carbon dioxide emissions by some 755,000 tonnes annually — the equivalent of the carbon offset provided by 142 million mature trees.

Malakoff has also started the construction of three run-of-river small hydropower plants along Sungai Galas in Kelantan, which the company said would offset a further 272,424 tonnes of carbon dioxide per year.

“Looking ahead, Malakoff will continue to broaden its assets portfolio through strategic partnerships and circular economy initiatives,” Anwar Syahrin said.

Maybank Investment Bank Bhd acted as the sole lead manager and facility agent for the sukuk, while Maybank Islamic Bhd served as the shariah adviser. Maybank Investment Bank also played the role of sustainability structuring adviser for the framework.

At the time of writing, Malakoff shares were up one sen or 1.3% to 80 sen, valuing the group at RM3.91 billion. Apart from power generation, Malakoff is also involved in water, renewable energy, as well as solid waste collection, management, and public cleansing services.