Malaysia to power green energy projects with US$430 million fund in ‘decade of action’

Malaysia, which gets year-round sunlight, sees potential to be a leading producer of renewable energy in the region

The amount is a blip of the 1.2 trillion ringgit (US$260 billion) that Anwar said Malaysia needs to invest by 2050 for its energy transition master plan

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People use umbrellas during a hot day in Kuala Lumpur on April 27. Malaysia’s economy is largely driven by its depleting oil and gas industry, but the nation gets year-round sunlight that is shining the light on the potential for Malaysia to be a leading producer of renewable energy in the region. Photo: EPA-EFE

Published: 6:21pm, 29 Aug 2023

Oil-rich Malaysia will establish a US$430 million seed fund for its ambitious plan to turn energy transition into the country’s next growth generator, Prime Minister Anwar Ibrahim said on Tuesday, in a “decade of action” to meet climate targets while creating new jobs.

With an economy that is largely driven by its depleting oil and gas industry, the Southeast Asian country is also blessed with a year-round sun and other natural resources, which means it now sees potential to be a leading renewable energy producer in the region.

The seed fund is aimed at providing financial resources to private and state energy transition projects that would otherwise yield below-market returns.

An aerial view of a small solar farm in Selangor, Malaysia. The country aims to produce 70 per cent of its energy through renewable sources by 2050. Photo: Shutterstock

It is, however, a blip compared to the 1.2 trillion ringgit (US$260 billion) that Anwar said Malaysia needs to invest by 2050 to execute its energy transition master plan which includes expansion of public transport, strengthening grid infrastructure and reskilling its workers.

“Within this decade alone, the government requires between 60 billion ringgit and 90 billion ringgit to be allocated for [those] crucial projects,” said the prime minister, who described financing the “paramount challenge” in the energy transition.

Speaking at the launch of the National Energy Transition Roadmap, Anwar insisted that Malaysia would be able to balance the “energy trilemma” of sustainability, security and affordability in the energy sector.

In May, the government set a target of producing 70 per cent of its energy through renewable sources by 2050 and lifted the ban on cross-border trade in renewable energy, especially to Singapore.