Kuala Lumpur: Malaysia's Deputy Prime Minister Fadillah Yusof announced that the Association of Southeast Asian Nations (ASEAN) countries require over USD three trillion in investments by 2050 to achieve energy transition goals. He emphasized the urgent necessity for a significant change in financing strategies to ensure success in this crucial sector during the "Energy Transition in ASEAN: Enhancing Regional Cooperation" conference at the 46th ASEAN Summit.
According to Kuwait News Agency, Fadillah, who also holds the position of Malaysia's Minister of Energy Transition and Water, pointed out that Malaysia alone needs more than USD 143 billion to meet its renewable energy targets as laid out in its national energy transition roadmap. He stressed that public funding is inadequate and urged regional governments to foster environments that attract local and international private investments. This would entail coordinated policy reforms and innovative financing mechanisms like blended finance and public guarantees to mitigate early-stage project risks.
Fadillah advocated for the strengthening of capital markets through instruments such as green bonds, Islamic sukuk, and sustainability-linked loans to channel funds into clean energy initiatives. He also emphasized the importance of implementing carbon pricing that accurately reflects emission costs to incentivize low-carbon technologies.
Highlighting the role of digitalization, Fadillah mentioned the benefits of smart grids, AI-based forecasting tools, and demand management systems in enhancing the resilience and efficiency of the region's energy systems. Domestically, he noted that Malaysia is aligning its policies and financial frameworks to support the transition, stressing that competitiveness and climate ambition must be integrated in a trade-oriented country like Malaysia.
Fadillah further outlined Malaysia's renewable energy supply program, which enables major companies to purchase power directly from private sector developers, fostering a market-driven approach to decarbonization. Additionally, he mentioned the Low Carbon Transition Fund, backed by Malaysia's central bank, which provides preferential financing for small and medium enterprises investing in clean technologies.