Independent power producer SKS Power has signed with a consortium of financial institutions to issue a RM5.6 billion Islamic bond to fund a power plant project, a senior banker said today.

CIMB Bhd chief executive Nazir Razak described the issue as the largest deal in the country so far this year.

CIMB, a top merchant bank in Malaysia, is one of the eight lead arrangers for the bond issue.

The first tranche of the SKS Power bonds of about RM1.62 billion would be issued in early November, consisting of tenures ranging from five to nine years, he was quoted as saying by the Bernama news agency.

The second tranche amounting to RM1 billion would be issued six months after the issuance of the first tranche, the merchant banker said.

RM7.8b power plant

Bernama said the issuance of the bonds would be done in five stages.

Nazir declined to disclose the indicative rates for the bonds.

Proceeds from the bond issuance would help SKS Power to part finance the construction of its 2,100 Megawatt coal-fired power plant in Tanjung Bin, in the southern Johor state, Bernama said.

The estimated total project cost is approximately RM7.8 billion.

SKS Power Sdn Bhd has been granted a licence by the energy commission to operate the Tanjung Bin power plant for a period of 28 years from September. - AFP