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World first green Sukuk worth RM250 million
Published on: Thursday, October 12, 2017

Putra Jaya: Malaysia will continue to be the leader in the Islamic green market by issuing more Green Sukuk to finance eco-friendly infrastructure projects, Energy, Green Technology and Water Minister Datuk Seri Maximus Ongkili said.

He said this would be carried out with the technical support of the World Bank, which shared international best practices with Malaysian government agencies and financial institutions.

Green Sukuk financing is an innovative method of providing global funding for sustainable development projects under the Sustainable and Responsible Investment Sukuk framework.

"With this conducive funding ecosystem, the Government is confident of achieving the target of generating 7,200 megawatt (MW) of renewable energy by 2020, of which 2,080 MW will be contributed by solar energy," he said on the sidelines of the hand over of the Green Sukuk Financing Document for Large-Scale Solar Projects, here, Tuesday.

The hand-over of the document involving Tadau Energy Sdn Bhd and Quantum Solar Park Semenanjung Sdn Bhd (QSPM), developers of solar power projects, and their investors, was witnessed by Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi.

Earlier, Prime Minister Datuk Seri Najib Tun Razak met QSPM Executive Director and ITRAMAS-led Consortium Managing Director Lee Choo Boo, Tadau Energy Managing Director Suzanna Lim, and the investors.

Ongkili said with the Green Sukuk financing, Malaysia made history in global green financing and sukuk with the issue of the world's first green sukuk worth RM250 million by Tadau Energy in July, which would be used to finance its projects in Kudat, Sabah.

He said the green sukuk financing resulted from cooperation between Bank Negara Malaysia, Securities Commission Malaysia and World Bank Group in an effort to develop an ecosystem to facilitate the growth of green sukuk and introduce innovative financial instruments to address global infrastructure and green financing needs.

This was followed by the world's largest green sukuk issuance of RM1 billion by QSPM to finance the construction of three large-scale solar photovoltaic solar power plants in Gurun (Kedah), Jasin (Melaka), and Merchang (Terengganu), with each plant generating 50MW of electricity.

"This will strengthen the country's position in Islamic green financing and efforts to introduce innovative Islamic financing products," Ongkili said.

At a press conference later, Ongkili said the first phase of the 2MV solar power generation project in Lausan near Kudat was completed and started operations on Sept 15, while the remaining 48MW was targeted to reach commercial operations in the first quarter of next year.

He said 2MW of the 50MW solar energy developed by Tadau Energy would be channelled to the Kudat Grid while the remaining 48MW would be injected into the transmission line for distribution throughout Sabah.

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