Malaysia allocates RM2 billion seed fund for National Energy Transition Facility

The biggest challenge in energy transition is financing, and Datuk Seri Anwar Ibrahim said that an estimated investment of at least RM1.2 trillion between 2023 and 2050, is needed to enable responsible energy transition.

The prime minister revealed that within this decade alone, the Malaysian government needs between RM60 billion and RM90 billion for crucial projects, including among others, the expansion of public transportation, strengthening grid infrastructure, and the reskilling of human capital.

“Considering Malaysia’s current state of ‘immature’ decarbonisation technologies, our progress will significantly hinge on alternative energy sources and robust regional and international collaboration,” Anwar said this morning at Tenaga Nasional Bhd’s (TNB) Energy Transition Conference 2023 at the Kuala Lumpur Convention Centre. The two-day conference started yesterday.

Also present were Economy Minister Rafizi Ramli, Natural Resources, Environment and Climate Change Minister Nik Nazmi Nik Ahmad, TNB chairman Datuk Abdul Razak Abdul Majid, and TNB president/chief executive officer Datuk Baharin Din.

“In this regard, the government will allocate RM2 billion as seed fund for the National Energy Transition Facility.

“This facility will enable catalytic-blended financing, to ensure a seamless flow of financial resources towards energy transition projects that are marginally bankable, or yielding below-market returns. For example, investments in the electric vehicle (EV) value chain, and hydrogen and CCUS (Carbon Capture, Usage and Storage) technologies.”

This morning’s session saw the launch of the full series of Malaysia’s National Energy Transition Roadmap (NETR).

Anwar added that the energy transition initiative brings about a ‘trilemma’ “that requires us to balance sustainability, security, and affordability in the energy sector.”

“Whilst Malaysia’s move to embrace sustainability has been gaining momentum, emphasis is also given to ensuring that we can provide affordable energy, as well as energy security.

“We are optimistic that the NETR will succeed in this balancing act. NETR will drive the creation of high-paying job opportunities and boost domestic and foreign investment participation, while ensuring the continuity of Malaysia’s green energy supply.

“Ultimately, this will make Malaysia a regional leader in the clean energy industry.”

Anwar added that Malaysia’s strategic position as the Asean Energy Hub enables the country to play a pivotal role in advancing Southeast Asia’s sustainable energy future, towards a Net Zero Asean.

He said utility companies such as TNB and Sarawak Energy are progressing in the cross-border business, leveraging on the Asean Power Grid.

“This will improve broader energy security prospects and further enhance economic integration with neighbouring countries.”

He said that TNB is already leading discussions with utility players in the region and governments for resource-sharing and flexibility solutions at scale.

“The move will accelerate the energy transition in a responsible manner, while balancing the elements of the energy trilemma,” he added.