Malaysia Building Society Berhad (MBSB) has agreed to provide up to 247 million ringgit (US$60.4 million) of Islamic financing to Solar Management (Seremban) Sdn Bhd to back the development of a 50 MW solar project in Peninsular Malaysia.
PV developer Solar Management (Seremban) will design, build and operate the array in Rembau, Negeri Sembilan. It is scheduled for completion by the end of November 2018.
The deal marks the first time MBSB has provided financing for a solar project. Solar Management (Seremban) will mainly use the funds to pay for EPC services and the commissioning of the project.
“The Islamic financing facility consists of 19 million ringgit of Performance Guarantee-i under the Kafalah concept and 228 million ringgit of term financing with the sub limit of 137 million ringgit under the Tawarruq and Kafalah concept respectively,” MBSB said in an online statement.
Tee Cheng Hua, director of Solar Management (Seremban), praised the Malaysian government’s feed-in-tariff (FiT) scheme, the Net Energy Metering (NEM) mechanism and its support for the development of large-scale PV plants.
Separately, Chinese state-run news agency Xinhua reported this week that China Machinery Engineering Corp. (CMEC) will supply PV equipment to Mattan Engineering, the EPC services provider that is working on the 50 MW array in Rembau. Under the terms of the 137 million ringgit contract, CMEC — a unit of China National Machinery Industry Corp. — will mainly provide PV modules and racks, Xinhua said.
MBSB’s financing package is the second Islamic financing facility to be announced for a PV project in Malaysia in recent weeks. In mid-November, Malaysian engineering firm Mudajaya revealed plans to raise up to 245 million ringgit by issuing sukuk Islamic bonds, to back the construction of a 49 MW solar array in the town of Sungai Siput, Kuala Kangsar, Perak.