[RAM] RAM Ratings affirms Ranhill Solar Ventures' sukuk at AA3

RAM Ratings has affirmed the AA₃/Stable rating of Ranhill Solar Ventures Sdn Bhd’s (RSV or the Issuer) Sukuk Murabahah Programme of up to RM310 mil (2022/2042) (the Sukuk). 

The rating reflects RSV’s strong cashflow coverage and liquidity profile that are supported by the satisfactory operations of its sister company, Ranhill Solar I Sdn Bhd (RSI), which owns and operates a 50 MWac solar photovoltaic farm (the Plant) in Bidor, Perak. The Issuer is the funding conduit for the Sukuk.

The Plant’s net energy output (NEO) remains in line with our expectations, cumulatively totalling 159,968.6 MWh from the start of operations in February 2024 up to end-July 2025 – 0.7% above the projection under RAM’s sensitivity analysis. However, initial teething issues and heavier than usual rainfall during the northeast monsoon between October 2024 and April 2025 affected the NEO. Overall, the Plant’s output consistently surpassed the minimum 70% of the declared annual quantity, as required by the power purchase agreement. 

No major outages have occurred since commercial operations began, with earlier operational concerns already addressed. For the 18-month financial period ending June 2025, RSI’s operating profit before depreciation, interest and tax was stable at RM20.6 mil (FY Dec 2023: RM13.5 mil), reflecting healthy operations. We expect steady generation, along with prudent cost management and semi-automated cleaning systems, to sustain the Plant’s operating efficiency. 

As at end-July 2025, the transaction’s combined cash balances strengthened to RM22.8 mil (end-December 2024: RM17.9 mil), supportive of its liquidity profile. Under RAM’s sensitised case, RSV is projected to maintain robust minimum and average annual post-distribution finance service coverage ratios of 1.64 times and 2.28 times, respectively. The Sukuk’s uneven amortisation profile nevertheless necessitates retention of cash reserves to meet periodic obligations and the minimum required maintenance and finance service reserve accounts balances. This may introduce potential liquidity pressure if sizeable distributions are made during the period when sukuk obligations are lower. 

The risk of excessive outflows is moderated by the independent management of key designated accounts, budgetary control and stringent distribution covenants, including RAM’s confirmation that any distribution will have no adverse rating impact. Our projections indicate minimal headroom for dividend distributions (RM8.5 mil throughout the Sukuk’s tenure).
 
The Plant remains exposed to the variability of solar irradiance, performance risks and regulatory developments, despite the federal government’s favourable stance on renewable energy projects. As a single-asset company, RSI is susceptible to force majeure and event risks, mitigated to some extent by insurance coverage, the modular design of the Plant and its large site.


Analytical contacts
Tan Yan Choong
(603) 2708 8256
yanchoong@ram.com.my

Chong Van Nee, CFA 
(603) 2708 8210
vannee@ram.com.my 

Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my