Tenaga Nasional Bhd (TNB), Malaysia’s biggest power producer, plans to raise $1.7 billion from a 20-year Islamic bond offering, said Che Khalib Mohamad Noh, CEO of TNB.

“We plan to sell the bonds in August or September. Proceeds will be used to finance a coal fired power plant at Manjung in the northern state of Perak,” he said. TNB is raising generation capacity to meet rising demand after shelving plans to buy electricity from the Bakun hydropower plant in Borneo earlier this year.

“It’s the right time to sell bonds in the domestic market, as there’s a lot of liquidity,” said Che Khalib. Three investment banks have been short-listed as underwriters, he added.

Malaysia is the world’s biggest issuer of sukuk that comply with Islam’s ban on interest payments. It had $94bn of Islamic bonds outstanding at the end of last year, accounting for 66 per cent of the total worldwide.

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