RM2 billion seed fund allocated for National Energy Transition Facility: PM Anwar - MIDA | Malaysian Investment Development Authority
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RM2 billion seed fund allocated for National Energy Transition Facility: PM Anwar

RM2 billion seed fund allocated for National Energy Transition Facility: PM Anwar

29 Aug 2023

Prime Minister Datuk Seri Anwar Ibrahim today unveiled Phase Two of the National Energy Transition Roadmap (NETR), which spells out the remaining initiatives to transform Malaysia into a regional leader in the energy transition and renewable energy (RE) industry.

Anwar, also the Finance Minister, said the government had identified six energy transition levers, 10 flagship projects and 50 initiatives under the complete series of NETR.

The initiatives, among others, will see the government setting aside RM2 billion as a seed fund for the National Energy Transition Facility.

“This facility will enable catalytic blended finance to ensure a seamless flow of financial resources towards energy transition projects that are marginally bankable or yielding below-market returns.

“For example, investment in electric vehicle (EV) value chain, hydrogen as well as carbon capture, utilisation and storage (CCUS) technologies,” said Anwar in his speech at the launching ceremony of Phase Two of the NETR here today.

Present were Economy Minister Rafizi Ramli and Natural Resources, Environment and Climate Change Minister Nik Nazmi Nik Ahmad.

Anwar added that the allocation was vital due to the present state of the country’s decarbonisation technologies, which he said were still at an “immature” level.

The progress of the country’s development, he said, hinged on alternative energy sources as well as robust regional and international collaboration.

“As the paramount challenge in energy transition is financing, it is estimated that an investment of at least RM1.2 trillion between 2023 and 2050 is needed to enable responsible energy transition.

“Within this decade alone, the government requires between RM60 billion and RM90 billion to be allocated for crucial projects, among others, expansion of public transportation, strengthening grid infrastructure and reskilling human capital,” he said.

Anwar also announced setting up a renewable energy exchange, scheduled to be launched next year, would act as a market aggregator enabling price discovery and monetising excess power.

“Energy efficiency as one of the energy transition levers offers effective long-term solutions to manage our energy consumption, thus reducing carbon emissions.

“The government will launch a major retrofit programme to enhance

energy efficiency in government buildings. In this regard, an energy service companies (ESCOs) platform will be established to connect private ESCOs, mainly SMEs, with government projects.

“The central role of the platform would be to serve as an intermediary that pools government building retrofitting projects and encourages public-private coordination in the ESCO market,” he said.

To ensure holistic energy planning and policy development as well as to monitor the progress of the NETR, Anwar said the government would activate the National Energy Council for such purposes.

“I personally see to it that the council functions as mandated,” he said.

Anwar said the NETR would accelerate and navigate the nation’s energy transition measures on a larger scale, thus ensuring success in shifting from a traditional fossil fuel-based economy to a high-value, green and sustainable economy.

“The primary goal is to change how energy is generated in Malaysia by accelerating the energy transition.

“This can resolve the climate change crisis. With the implementation of initiatives under the NETR, Malaysia is set to be at the forefront of becoming a regional leader in the energy transition and RE industry,” he said.

Anwar said Malaysia recognised the importance of RE sources.

In the early 1990s, he said RE was named the fifth fuel under the National Energy Policy.

“Today, the RE sources are solar, mini hydro, biomass and biogas. The RE supply in Malaysia is now at 25 per cent, and we are on the right track to source 31 per cent of its power capacity from renewables by 2025 and 40 per cent by 2040.

“The NETR details how we will achieve these objectives,” he said.

Whilst Malaysia’s move to embrace sustainability has been gaining momentum, Anwar nevertheless said emphasis should also be given to ensuring that the country can provide affordable energy and energy security.

“We are optimistic that the NETR will succeed in the 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,” he said.

Earlier in his speech, Nik Nazmi described NETR as Malaysia’s overarching macro policy document covering the country’s energy transition pathway for the power, transportation, manufacturing and oil and gas sectors.

Source: NST