MRL sets up Islamic commercial papers, MTN programme of up to RM10.21bil

KUALA LUMPUR: Malaysia Rail Link Sdn Bhd (MRL) has established Islamic Commercial Papers and Islamic Medium Term Notes Programme of up to RM10.21 billion in nominal value, with an option to issue Sustainable and Development Goals (SDG) Sukuk, marking the first for a Government Guaranteed Sukuk and another first for the transport industry.

In a statement today, MRL said the programme signals its commitment to driving infrastructural development and economic growth in the region.

It also represents a major milestone for the financial landscape as it offers the opportunity for investors to participate in a groundbreaking initiative aimed at part financing for the construction of the 665-kilometre East Coast Rail Link (ECRL) alignment that stretches from Kota Bharu to Port Klang.

“This commitment to sustainability further distinguishes the programme as a trailblazer in ethical investment initiatives which aligns with MRL’s broader initiative to use green energy for the project upon operation in January 2027,” it said.

The SDG Sukuk Framework has been assigned a ‘Gold’ Impact Assessment by MARC Ratings Bhd and established to set the guiding principles for MRL’s issuance of SDG Sukuk for specific eligible projects that contribute towards environmental and social benefits.

MRL chief executive officer Datuk Seri Darwis Abdul Razak emphasised that the Sukuk Murabahah Programme signifies the ongoing effort to incorporate Islamic finance into substantial infrastructure projects, and this aligns with the SDG endorsed by the United Nations as part of the 2030 Agenda for Sustainable Development.

“The SDG Sukuk also synergistically advances eco-conscious practices within the realm of finance and infrastructure development, cater to the distinct needs of both government and private stakeholders, as well as across various sectors,” he said.

He further elaborated on the intricacies of the Sukuk Murabahah Programme which encompasses three revolving credit facilities designed in compliance with both conventional and Islamic finance principles from various local financial institutions, supported by the participation of 10 financial institutions.

“The complexity of liaising with 10 financial institutions arises from the need to orchestrate a seamless collaboration among diverse stakeholders,” he noted.

MRL also said that the RM50.27 billion ECRL project was financed by a combination of soft loans by the Export-Import Bank of China and Sukuk issuance by local financial institutions.

The project is scheduled for completion in December 2026 and is expected to link Kota Bharu to the Integrated Transport Terminal in Gombak in four hours as compared to seven hours by road transport or more than 12 hours during festive season. – BK