PAAB Raises RM720 Million Blue Sukuk for Water Infrastructure

Pengurusan Aset Air Berhad (PAAB), Malaysia’s national water asset company, has raised RM720 million through a Blue Sukuk issued via its special purpose vehicle, Pengurusan Air SPV Bhd, according to The Star. The sukuk was priced on July 29, 2026, BusinessToday Malaysia reported. It drew total orders of RM770 million against an initial issuance size of RM500 million, an oversubscription of 1.54 times, both outlets reported.

The issuance was made under PAAB’s existing RM2 billion Islamic Commercial Papers Programme, both outlets reported.

Eight Projects, Six States

BusinessToday Malaysia reported that the proceeds will fund eight water infrastructure projects spread across Melaka, Kelantan, Negeri Sembilan, Pulau Pinang, Kedah, and Johor. The Star carried the same list of states.

The sukuk was structured under PAAB’s Sustainable Islamic Finance Framework (SIFF), which both The Star and BusinessToday Malaysia describe as Malaysia’s first sustainable Islamic finance framework to incorporate Blue Finance features. Maybank Investment Bank Bhd acted as Sole Sustainability Structuring Adviser on the deal, The Star reported.

Zulkiflee Omar, PAAB’s chief executive, said the issuance “reflects strong investors’ confidence in PAAB’s credit strength, prudent financial management and long-term sustainable financing strategy,” according to The Star. He added that PAAB “will continue to mobilise sustainable capital that reinforces Malaysia’s position as a global leader in sustainable Islamic finance.” Michael Oh-Lau, chief executive of Maybank Investment Bank, said the deal “showcases the potential of blue finance to mobilise long-term capital for Malaysia’s water infrastructure as well as in Asean,” per The Star.

PAAB itself describes the RM720 million issuance as the world’s largest Blue Sukuk, The Star and BusinessToday Malaysia reported; that characterization comes from the issuer. For background, see The Halal Times’ earlier reporting on Malaysia’s sukuk market and on green sukuk.

A Framework Rated in March

The SIFF’s Platinum Sustainable Finance Rating was assigned in a March 2026 assessment, when RAM Sustainability described the framework as the first in Malaysia to include Blue Financing. According to a March 2026 RAM Sustainability release, the framework’s pipeline included RM7.62 billion in projects aligned with WST 2040, alongside a national target of cutting non-revenue water losses to 28.8% by 2030 from a 2024 baseline of 34.3%.

A Separate Blue Sukuk, A Separate Issuer

Separately, Pengurusan Air Selangor Sdn Bhd (Air Selangor) priced RM200 million of what that company called the world’s first Blue Sukuk, BusinessToday Malaysia reported on July 29, 2026. Air Selangor is a state water operator serving Selangor; PAAB is the national water asset company. They aren’t the same company, and the two deals aren’t the same transaction.

Air Selangor’s issuance, named the Blue SRI Sukuk Kelestarian, carries a 15-year tenure and was issued under its own RM20 billion Islamic Medium Term Notes Programme, with CIMB Investment Bank Berhad as Sole Sustainability Structuring Adviser and Sole Lead Manager, per BusinessToday Malaysia. RAM Sustainability issued a Preliminary Assessment, the outlet reported.

Nor Masliza Sulaiman, chief executive of CIMB Investment Bank, said of the Air Selangor deal that “CIMB is pleased to have played a key role in the successful issuance and to have advised Air Selangor on the enhancement of its Sustainable Development Sukuk Kelestarian Framework,” according to BusinessToday Malaysia. The “world’s first” and “world’s largest” labels describe two different transactions from two different issuers.

Proceeds from PAAB’s RM720 million Blue Sukuk are due to be received on August 3, 2026, according to The Star.

Frequently Asked Questions

How much did PAAB raise in its Blue Sukuk?
PAAB raised RM720 million, with total orders of RM770 million marking an oversubscription of 1.54 times over the initial RM500 million issuance size, according to The Star and BusinessToday Malaysia.

What will PAAB’s Blue Sukuk proceeds fund?
The proceeds will finance eight water infrastructure projects across Melaka, Kelantan, Negeri Sembilan, Pulau Pinang, Kedah, and Johor, BusinessToday Malaysia reported.

Is PAAB’s Blue Sukuk really the world’s largest?
PAAB describes the issuance as the world’s largest Blue Sukuk, The Star reported. That’s the issuer’s own characterization.

What sustainability rating applies to PAAB’s framework?
PAAB’s Sustainable Islamic Finance Framework holds a Platinum Sustainable Finance Rating, according to RAM Sustainability’s March 2026 rating release.

Is PAAB’s Blue Sukuk the same deal as Air Selangor’s Blue Sukuk?
No. PAAB and Air Selangor are separate companies with separate issuances; Air Selangor priced a RM200 million Blue Sukuk it called the world’s first, reported by BusinessToday Malaysia on July 29, 2026.