HSBC Amanah arranges first ASEAN Green Sustainable and Responsible Investment Sukuk for Leader Energy

HSBC Group, through HSBC Amanah Malaysia Berhad (HSBC Amanah) was lead arranger for the Group’s first ASEAN Green Sustainable and Responsible Investment (SRI) Sukuk for Leader Energy Sdn Bhd (Leader Energy), an investment holding company 100 percent owned by HNG Capital Group that is focused on renewable power generation.

HSBC Amanah also acted as the Sole Principal Adviser and Sole Lead Manager on the successful issuance of this multi-tranche 1 to 18-year RM260 million Sukuk Wakalah which also marks Leader Energy’s debut project financing issuance in the Malaysian Ringgit Bond market.

Part of Penang-based HNG Capital Group, the Group’s power business segment is principally involved in the power generation and transmission sector, mainly through owning and operating power plants in the ASEAN region.

At present, the Group is largely focused on renewable energy projects in Malaysia and Vietnam. Proceeds of the sukuk will be used to refinance existing HSBC facilities which were granted to support the development of two large scale solar photovoltaic power projects in Kuala Muda, Kedah with a combined capacity of 49MWac.

The two projects are operating under concessions awarded pursuant to Malaysia’s Large-Scale-Solar LSS1 and LSS2 energy bidding programmes by the Energy Commission of Malaysia.

This sukuk, which has been assigned an AA-IS rating by Malaysian Rating Corporation Berhad (MARC), has also been accorded a “Gold” sustainability bond rating, the highest grade of MARC’s Impact Bond Assessment methodology, implying the sukuk’s alignment with International Capital Market Association’s Green Bond Principles, ASEAN Green Bond Standards, and the Securities Commission Malaysia’s SRI Sukuk Framework.

In addition to being the first ASEAN Green SRI Sukuk in 2020, the sukuk is also the lowest ever weighted average cost of financing amongst the AA3/AA- solar power project financing Sukuk issuances and the lowest ever coupon for AA3/AA- solar power project financing Sukuk issuance.

“My warmest congratulations to Leader Energy on this successful rated solar power project financing issuance that marks HNG Capital Group’s debut in the Malaysian Ringgit sukuk market. Despite the challenging market conditions as a result of the Covid-19 pandemic, this transaction attracted robust demand from 12 investors, comprising high quality insurance companies, asset managers and financial institutions. This shows tremendous appetite for sustainable and green focused offerings in the market and we at HSBC are proud to have partnered with Leader Energy for this landmark issuance,” said Stuart Milne, Chief Executive Officer, HSBC Malaysia.

“HSBC Amanah is committed to transforming into a sustainable banking entity and the development of industry leading sustainable product offerings such as this ASEAN Green SRI Sukuk, clearly demonstrates our continued commitment and ability to develop the landscape of sustainable banking products available in Malaysia,” said Oz Ahmed, Chief Executive Officer, HSBC Amanah.

“This new issuance also reflects HSBC Amanah’s commitment to financing projects that
benefit communities and the environment in line with Bank Negara Malaysia’s Value-based Intermediation (VBI) initiative and HSBC Group’s responsibility to help finance global sustainable development and to create greater value and impact.”

“HSBC Malaysia has been supporting HNG Capital Group for the past 40 years and it is one of the principal banks which supports the Group’s business expansion in the ASEAN region. HNG Capital is aggressively pursuing power generation projects throughout the ASEAN region and we are proud to partner and work with HSBC that has a strong track record in developing sustainable solutions and who also echoes our goal to help pave the path towards a sustainable and renewable future,” said Sean H’ng, Group Chief Executive Officer, HNG Capital Sdn Bhd.

“Our first project financing sukuk issuance for HNG Capital Group is a success and we look forward to working closely with HSBC Malaysia as we chart our course towards a greener future and continue to expand our footprint in renewable energy projects across our core markets in the ASEAN region.”

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