1MDB’s Project 3B to Rely on Islamic Bonds

1MDB’s Project 3B to Rely on Islamic Bonds1MDB’s Project 3B to Rely on Islamic Bonds

Malaysia sovereign fund, 1Malaysia Development Bhd (1MDB), will raise 8.4 billion ringgit ($2.56 billion) with Islamic bonds to build a power plant, IFR reported on Wednesday.

1MDB, which is chaired by Prime Minister Najib Razak, is partners with Mitsui & Co Ltd on the 2,000 megawatt coal-fired plant, known as Project 3B.

The consortium will rely on Islamic bonds to cover most of the $3.35 billion needed for the project, after plans to raise $2.56 billion via a debt program led by Japan Bank for International Cooperation fell through, IFR said.

AmInvestment Bank is the sole lead manager on the sukuk, which has been set to close by November.

The greenfield power plant is expected to start operations in 2018 and run for 25 years. The fund, which owns 16 power and desalination plants in six countries, is preparing to list its power assets in January with an IPO of $3 billion, after financing a second debt refinancing agreement this month, Reuters reported on Tuesday.