eisv2017 Local IPPs to raise RM13bil more to nance new plants -Business News | The Star Online More UPDATED EVERY 5 MINUTES National and Sarawak state-controlled, vertically integrated utility companies ~ Tenaga Nasional Bhd (TNB) and Sarawak Eneray Bhd (SEB) ~ remained healthy, both operationally and financially, PETALING JAYA: Local independent power producers (IPPs) are expected to raise an additional RM13.3bil in debt to finance their upcoming plants, according to RAM Ratings. In a report on the power sector, the rating agency pointed out that since 2014, Malaysian IPPs have already raised RM17bil for new plants. This is backed by capacity expansion prospects which are still favourable for the sector and the Government's drive to implement large-scale solar plants. _ PE THESTAR ONLINE “Approximately 10,000MW of capacity will be added to Malays 4 at Commission's data as well as our expectation of capacity pla > Stay updated daily with our FREE email “Fossil-fuel plants remain the core of our electricity generatior "ewsietter, yt RAM noted your e-mail address Keeping a stable outlook on the Malaysian power sector in 20 > industry's sound regulatory framework. By clicking onthe Sign Up itn, tis dered hat ou Against this backdrop, national and Sarawak state-controlled, vertically integrated utiinty companies ~ Tenaga Nasional Bhd (TNB) and Sarawak Energy Bhd (SEB) ~ remained healthy, both operationally and financially. hpiliwnw thestar.com myrbusiness/business-newsi20' 7/09/04Mocabipps-to-aise-rm 1 3bi-more-o-fnance-new-planis/ 20eisv2017 Local IPPs to raise RM13bil more to nance new plants -Business News | The Star Online ur Sites More UPDATED EVERY 5 MINUTES CO ee All of RAM's rated sukuk from IPPs have a stable outlook, except Jati Cakerawala Sdn Bhd, which was placed on negative outlook, on RAM's concern that if Jati continued its generous dividend payout, it would weaken its cash balances On the other hand, TNB was rated A4A/stable and SEB AA1/stable. It continued to rate independent power utility company, NUR Power Sdn Bhd, AAA/stable. Itis learnt that the company is licensed to generate, distribute and sell electricity (220MW) to tenants in Kulim Hi-Tech Park, Kedah. RAM noted that demand for power increased 5.6% year-on-year (y-0-y) to 135,584 GWh in 2016, driven by electricity sales to the commercial sector and partly due to higher electricity consumption amid warming effects of the El Nino phenomenon in the middle of the year. “The El Nino had also contributed to the increase; peak demar ot Peninsular Malaysia, while that in Sabah and Sarawak came u x THE STAR ONLINE “We expect demand to keep rising by 2%-3% per annum in this Stay updated daily with our FREE email jent economic growth of 5.4% in 2017,” RAM said. newsletter Essentially, subsidy rationalisation remained a focal point, wit! your e-mail address Sign Uj months reaching RM22.70 per mmbtu in Peninsular Malaysia By clicking onthe But, TNB has remained neutral to fuel-cost changes as any flu consent to out consumers under the incentive-based regulation (IBR) framework, accoraing to KAM's report ign Up button, itis deemed that you It expected upward pressure on electricity tariffs, given the persistent increase in fuel costs. hpiliwnw thestar.com myrbusiness/business-newsi20' 7/09/04Mocabipps-to-aise-rm 1 3bi-more-o-fnance-new-planis/ a0eisv2017 Local IPPs to raise RM13bil more to nance new plants -Business News | The Star Online ur Sites More UPDATED EVERY 5 MINUTES aveiaye Het taint 2017. U aL O/.U 1 SEIV AYE, WU! @ 2.04 SEI RWI TewaLe IU! YuLy-LeLeNWe! The IBR mechanism was implemented in Sabah in 2016 and currently on trial run, with a possible extension till 2018. ADVERTISING O Replay After that, the first regulatory period will begin from 2019 to 2021 For Sabah Electricity Sdn Bhd (SESB), which has been getting support from the Government, it would likely experience an upward tariff revision should Sabah fully adopt the IBR mechanism. “We believe the rollout plans for the IBR may be challenging because SESB will still require the Government's financial assistance to sustain its day-to-day operations,” RAM said. Unlike Sabah, Sarawak’s electricity tariffs were controlled by the state government and it has effected tariff reductions for the domestic, commercial and industrial ¢ 342 THe STAR ONLINE ariff of 19.63 sen/kWh as at end-December 2016, ayeh Given the upcoming plants and assuming a 3% annual growth, Ste detec daly wth our FREE emai average peak demand increase of 2% per annum, RAM pointe, "*"s'*"*" margin is expected to peak at 38% by 2021 versus the Govern your e-mail address Sign U By dickng on th ign Up button, itis deemed that you TAGS / KEYWORDS: Oil & Gas, Stocks , Independent Power Supply hpiliwnw thestar.com myrbusiness/business-newsi20' 7/09/04Mocabipps-to-aise-rm 1 3bi-more-o-fnance-new-planis/ 4n0