KUALA LUMPUR (Oct 30): Malakoff Corp Bhd’s (KL:MALAKOF) has established a RM700 million green sukuk programme to partly finance the development of Melaka’s first waste-to-energy (WTE) in Sungai Udang, which is expected to be completed in 2029.

The 30-year programme was lodged with the Securities Commission Malaysia through its subsidiary, Sungai Udang WTE Sdn Bhd, according to a statement on Friday.

The facility, which is being developed under a 34-year concession agreement that took effect on June 18, 2026, will be able to process up to 1,056 tonnes of municipal solid waste daily while generating 22.1 megawatts (MW) of renewable electricity. 

Malakoff said the project is expected to divert more than 300,000 tonnes of waste from landfills annually and prevent about 75,000 tonnes of carbon dioxide emissions every year.

Sungai Udang WTE is 60% owned by Malakoff, with the remaining 40% held by Alam Flora Environmental Solutions Sdn Bhd, an indirect subsidiary of the group.

The sukuk programme, which has received a preliminary AA-IS rating from MARC Ratings Bhd, will be used to partly fund the development, design and construction of the facility.

Malakoff group chief executive officer Syahrunizam Samsudin said the project would help expand the group’s environmental solutions business while reducing reliance on landfills.

"Environmental Solutions complements our power generation business, with WTE providing an additional avenue for sustainable growth," he said.

He added that the facility would support Malakoff’s target of expanding its waste management capacity to 10,000 tonnes per day by 2031.

RHB Investment Bank Bhd is the principal adviser, lead arranger and lead manager for the sukuk programme.

The project, previously reported to cost RM660 million, moved into construction earlier this year after Malakoff awarded the engineering, procurement and construction contract to a consortium led by Japan's Kanadevia Corp. 

More recently, Malakoff awarded a RM34.39 million contract to MMC Engineering Sdn Bhd for transmission works connecting the facility to Tenaga Nasional Bhd's (KL:TENAGA) electricity network. The works are scheduled for completion by May 2029. 

Shares of Malakoff closed unchanged at 81 sen at Friday's market close, valuing the group at RM4.05 billion.