An OCBC Bank (Malaysia) Berhad (OCBC Bank)-led consortium of lenders is financing a Large-Scale Solar (LSS) Plant, in Bukit Keteri, Perlis that is setting fresh benchmarks for “green” syndicated project financing involving LSS plants in the country.

The project financing structure for the promoter of the project, KBJ HECMY Sdn Bhd, is aligned to meet the Asia Pacific Loan Market Association’s (APLMA) Green Loan Principles to ensure global acceptance and benchmarking.

OCBC Bank is the Bookrunner and Mandated Lead Arranger of the syndicated project financing.

KBJ HECMY Sdn Bhd – a joint venture between Hanwha Energy Corporation Singapore Pte Ltd and Konsortium Berseri Jaya Sdn Bhd – will use the proceeds from the facility to part-finance the development of their 30MW solar plant in Perlis. It was one of the successful bidders under Package P3 (10MWa to 30MWac) of the Energy Commission’s LSS2 tender programme.

The project financing effort comes on the heels of the OCBC Group’s announcement last month that it will stop financing coal-fired power plants globally in order to inspire a shift to cleaner and greener sources of energy.

OCBC Bank’s Managing Director/Senior Banker, Client Coverage & Head of Investment Banking, Ms Tan Ai Chin said, “OCBC Bank is committed to the development of renewable energy in Malaysia, in support of the Malaysian government’s target to increase the country’s generation mix from renewable energy to 20% by 2025. Our two-pronged approach is to first cease financing coal-fired power plants and then replace them with greener alternatives such as the LSS plant in Perlis.

“This syndicated green project financing is a testament of our pledge towards financing sustainable developments as we seek to ramp up efforts to increase the percentage of renewable energy projects in our portfolio,” she said.

According to Hanwha Energy Corporation’s CEO, Du-Hyoung Ryoo, the company is excited about the initiative and is pleased to have brought together the industry’s leading players in solar PV engineering, procurement, construction and manufacturing under one consortium.

“This is our first venture in Malaysia as a solar PV plant developer and we are hopeful the project will be a benchmark for future related LSS plants in the region,” he said.

Hanwha Energy Corporation Singapore Pte Ltd is a wholly-owned subsidiary of Hanwha Energy Corporation (HEC), a multinational energy solutions provider. HEC in turn is part of the Hanwha Group, one of the largest business conglomerates in South Korea with business interests spanning chemicals & materials, aerospace & mechatronics, construction, financial services, leisure & lifestyle and energy.

The solar plant is expected to commence commercial operations by the second quarter of 2020 under a 21-year Power Purchase Agreement with Tenaga Nasional Berhad.