Green Bond Fact Sheet

Telekosang Hydro One

Date: 28/07/2019

Issue date: 15-07-2019 Maturity date: 15-07-2037 Tenor: 18Issuer Name

Telekosang Hydro One Amount Issued
Sdn Bhd

MYR470m (USD115m)

Country of risk

Malaysia

CBI Database

Included

Issuer Type1

Non-financial
corporate

Bond TypeSukuk

Green Bond Framework

N/A

Second party opinion

N/A

Certification Standard

Not certified

Assurance report

N/A

Certification Verifier

N/AGreen bond rating

AA3 (RAM)☒ Energy☐ Solar☐ Onshore wind
☐ Offshore wind
☐ Geothermal☒ Hydro☐ Tidal☐ Biofuels☐ Bioenergy☐ District heating☐ Electricity grid

☐ Energy storage☐ Energy performance☐ Infrastructure☐ Industry: components☐ Adaptation & resilience☐ Buildings☐ Certified Buildings☐ HVAC systems☐ Energyperformance☐ Water performance☐ Energy storage/meters☐ Other energy related☐ Industry: components☐ Adaptation & resilience☐ Transport☐ Electric vehicles☐ Low emissionvehicles☐ Bus rapid transit☐ Passenger trains☐ Urban rail

☐ Freight rolling stock☐ Coach / public bus☐ Bicycle infrastructure☐ Energy performance☐ Transport logistics☐ Infrastructure☐ Industry: components☐ Adaptation & resilience☐ Water & wastewater☐ Water distribution☐ Water treatment☐ Wastewatertreatment☐ Water storage☐ Storm water mgmt
☐ Flood protection☐ Desalinisation plants☐ Erosion control☐ Energy performance☐ Infrastructure☐ Industry: components☐ Adaptation & resilience

Use of Proceeds☐ Waste management☐ Recycling☐ Waste prevention☐ Pollution control☐ Landfill, energy capture☐ Energy performance☐ Infrastructure☐ Waste to energy☐ Industry: components☐ Adaptation & resilience☐ Land use & agriculture☐ Afforestation/parks☐ FSC Forestry☐ FSC Cellulose &paper☐ Land remediation☐ Energy/water efficiency☐ Sustainable agriculture☐ Adaptation & resilience☐ Other☐ Adaptation &resilience☐ ICT☐ Industry: process

Issue details
ReportingCompany information

Telekosang Hydro One is a private limited company. It was formed in 2017 for theconstruction of this hydro plant.

Firsts, records andcertifications

World’s first mini-hydro Sukuk (other Sukuks have financed hydro but not exclusively, andnot for a mini project).
Also the first Malaysian bond greater than USD100m in 2019, and the largest Malaysianbond since December 2017

Proceeds descriptionClimate Bonds viewTo finance the construction of a 24MW run-of the-river hydro plant. The issuer signed a 21year Renewable Energy Power Purchase Agreement (REPPA) with Sabah Electricity, with ascheduled Feed-in Tariff commencement date for the project of 31st July 2021, i.e. expected24-month construction period.

RAM Ratings highlighted a moderate degree of construction risk, particularly withrespect to geographical challenges and logistical difficulties in the construction of accessroads and waterways amid a mountainous location. We note that the issuer has madeprovisions for this (e.g. by setting up a contingency sum) and hope that Telekosang andother involved parties are able to make good use of them in case such challenges domaterialise.
Hydro already constitutes a significant proportion of Malaysia’s renewable energy mix, but
renewables must grow further in order for the country to meet its NDC climate goals. This
project should support this.
Finally, Telekosang’s (Senior) Sukuk is the world’s first for a mini-hydro project that isaligned with the requirements of Securities Commission Malaysia’s Sustainable andResponsible Investments Sukuk Framework, the ASEAN Green Bond Standards, and theGreen Bond Principles. We are pleased to see the green Sukuk market continue to expand,adding another non-financial corporate to its pool of issuers. It would also be good,
however, to see more Sukuk issuance for sectors other than energy (9 of the 10 issued so
far funded energy, 5 of which did so exclusively).

Underwriters
Deal comments
Credit Rating

MIDF Amanah Investment Bank

Pricing summary
Investors summary

1Issuer categories: ABS, development bank, financial corporate, government-backed entity, loan, local government, non-financial
corporate, sovereign