Green Bond Awards 2018

Award for innovation - bond structure: Tadau Energy

Tadau Energy's RM250 million ($59 million) sukuk was the first to be labelled green.

Deal highlights:

Issuer: Tadau Energy

Deal Type: Green Sukuk

Rating: AA3 by RAM Rating Services

Lead managers: Affin Hwang Investment Bank

Legal advisor to issuer: Dr. Aznan Hasan

Size: RM250.0 million ($59 million)

Tenor: Varying from two to 16 years

Date of Issue: July 2017

Use of proceeds: Renewable energy

External assessment: Cicero (dark green rating)

Highlights: First green sukuk 

"Tadau Energy's green sukuk framework was conceptualised based on the Green Bond Principles which promotes transparency, management of proceeds and ring-fencing of cash flows," explains Juniza Zahari, director of debt capital markets at Affin Hwang Investment Bank, which underwrote the deal.

The proceeds of the bond were to help finance a 50MW solar project in the state of Sabah. It is the first time that a solar project has tapped the capital markets for funding in Malaysia.

With the framework rated 'dark green' by the Centre for International Climate and Environmental Research in Oslo (Cicero), it served as a template for other issuers to follow. Issuers from Malaysia have since joined the green sukuk market, such as Quantum Solar Park, PNB Merdeka Ventures, Segi Astana and Mudajaya Group, raising a combined $635 million.

The offering was well received by investors, particularly the long-dated series of 10 years and above, which were oversubscribed by up to four times, and the overall offering was more than twice oversubscribed.

"We are pleased with the issuance of Green SRI Sukuk Tadau, as it exemplifies our commitment towards green energy and sustainable responsible investment," said Chua Ma Yu, chairman of the board of directors of Tadau Energy. "We strongly believe that green energy is the way forward and this industry has tremendous potential for growth."