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Lebuhraya DUKE Fasa 3 Sdn Bhd​, a special purpose vehicle fully owned by Ekovest, has announced it is to finance a toll road project in Malaysia.

The company is set to issue MYR3.64 billion (US$903 million) of Sukuk debt to finance Malaysia’s largest toll-road project, the Setiawangsa-Pantai Expressway (SPE), formerly known as Duta-Ulu Klang Expressway (DUKE) Phase-3 project.

Proceeds from the Sukuk will be used for part of the MYR3.9 billion (US$968 million) construction cost of the 32.1-kilometre SPE project. 

The total investment of the SPE development is estimated at MYR5.05 billion (US$1,253 million), taking into consideration the debt service covering ratio (DSCR) within the construction.

As part of the financing structure, Ekovest will inject MYR850 million (US$211 million) of equity into the project.

The government would inject MYR560 million (US$139 million) through the Reimbursable Interest Assistance (RIA) within a three-year period and Ekovest would pay back within eight years.The SPE development will be the first PPP project to use the government’s RIA as part of its financing structure.

Debt arrangers are AmInvestment Bank Bhd, CIMB Investment Bhd, Maybank Investment Bhd and RHB Investment Bhd.

The Sukuk Wakalah is in nominal value based on the Shariah principle of Wakalah Bi Al-Istithmar and has been assigned a rating of AA-IS by Malaysian Rating Corporation Bhd.

The SPE project will traverse north to south of Kuala Lumpur and will serve areas such as University Tunku Abdul Rahman, Wangsa Maju, Setiawangsa, Ampang, the Tun Razak Exchage & Bandar Malaysia development corridor and Kerinch.

SPE is expected to relief peak hour congestion on existing arterial roads and expressways along its proposed alignment. It is also expected to improve connectivity with existing expressways and public rail transportation system such as the KTM Komuter, LRT and MRT lines and providing a holistic and transport system to support the development and modernization of Greater Kuala Lumpur.

The toll rate, based on Ekovest’s financial model, was expected to be at MYR7 (US$1.74 million) one-way throughout the 32.1km highway, which will comprise two toll plazas and five toll ramps.