MUFG Spearheads Green Financing Facility For 100MW Solar Plant In Malaysia

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Mitsubishi UFJ Financial Group, Inc.’s banking subsidiary in Malaysia, MUFG Bank (Malaysia) Berhad (MUFG), announced that it acted as mandated lead arranger and sole green structuring advisor for a RM342 million syndicated financing facility for the development of a 100-megawatt solar plant located in Perak, Malaysia. The deal achieved financial closure in December 2020 and is MUFG’s second solar transaction in Malaysia, reaffirming the bank’s commitment to supporting the country’s renewable energy development goals and its market leadership in sustainability financing and the Asia-Pacific (APAC) renewables sector.


The Kerian solar plant, named after a district in northwestern Perak, is commissioned by a consortium comprising local power company TTL Energy Sdn Bhd and ENGIE Asia Pacific (“ENGIE”), the APAC arm of the French multinational energy company Engie SA, which was one of the successful bidders under the third cycle of the Large-Scale Solar (LSS3) scheme introduced by the Malaysian government to increase electricity generation from renewable energy. It is scheduled for commercial operation in Q1 2022 under a 21-year Power Purchase Agreement with Tenaga Nasional Berhad (TNB).


As Green Structuring Advisor, MUFG worked closely with ENGIE to develop a green loan
framework that not only served as the basis for the Kerian solar plant transaction, but will underpin all of the company’s greenfield renewable energy projects in APAC moving
forward. This framework is aligned with the four core components of LMA’s Green Loan
Principles1 , providing clear guidance on how to select eligible green projects, manage net proceeds and report on the allocation and environmental impact of such loans. It is also the first project financing in Malaysia’s renewable energy sector to obtain a green loan certification from Sustainalytics, a leading independent global provider of ESG and
corporate governance research and ratings.


The Kerian solar park transaction is MUFG’s second solar deal in the country and follows
the bank’s closing of an Islamic syndication for TNB’s solar project in Bukit Selambau,
Kedah in 2019.

As the latest project loan to be certified green by MUFG in APAC, it also represents the
bank’s continuing efforts in supporting clients in their sustainability objectives, other recent examples including the bank’s role as green structuring advisor in transactions such as the Canberra Metro’s debt refinancing in Sydney, Australia, and the financing for Softbank’s 600MW solar project in Rajasthan, India.


Mr. Colin Chen, MUFG’s Head of Structured Finance, Asia Investment Banking Division,
said: “We are delighted to have participated in this exciting project, which not only allowed us to leverage our strong track record and expertise in the renewables space on behalf of the client, but also contribute to Malaysia’s ongoing efforts at achieving self-sufficiency in clean energy. The deal is a further example of MUFG’s commitment towards aligning its ESG principles and social mission with like-minded partners such as ENGIE, and we look forward to supporting more projects that will make a positive difference to the environment.”


Mr. Thomas Baudlot, CEO of ENGIE South East Asia, said: “We are excited to contribute
to Malaysia’s renewable energy agenda, fostering greener economies and a cleaner
environment. As a company that is committed to accelerating the transition towards a
carbon-neutral world, we are proud to be able to play a pivotal role in supporting the
country’s renewables push through LSS3 and be a part of its sustainable growth and
vibrant economy.”

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