KUALA LUMPUR: Malaysia is set to require approximately RM637 billion in new investments until 2050 as it transitions to renewable energy (RE), according to Natural Resources, Environment and Climate Change Minister Nik Nazmi Nik Ahmad.
Speaking at the Climate Finance Summit in Sasana Kijang, Nik Nazmi highlighted that the revised electricity tariff surcharge had resulted in businesses consuming energy in a more climate-friendly manner, with more companies now adopting RE and improving energy efficiency.
“The government increased the surcharge for non-domestic consumers using high and medium voltage by nearly 400%. There were many complaints initially, but a few months later, more companies have installed solar panels and are taking energy efficiency measures because the price of energy is now closer to the market price,” he explained.
In order to achieve a more rational and climate-friendly consumption of energy in Malaysia, Nik Nazmi emphasized the importance of targeted subsidies. He also reaffirmed the government’s commitment to transitioning from coal-based energy sources to RE.
Furthermore, Nik Nazmi called on the financial sector to join forces in facilitating this transition, stating that “an estimated RM637 billion in new investments for RE is required up until 2050.” These investments would cover various areas such as RE generation sources, grid infrastructure strengthening, energy storage system integration, and grid system network operation augmentation.
However, the exact total of new investment required to achieve net-zero emissions in the country is still being determined through comprehensive studies, he added.
Nik Nazmi stressed that this transition is crucial in mitigating the effects of climate change, which have been impacting countries worldwide. Malaysia is expected to incur adaptation costs amounting to USD85 billion (RM392 billion) over the next 50 years.
“The cost of the energy transition, which is the backbone of successful climate action, is immense,” he noted. Therefore, the government aims to accelerate the deployment of RE and increase its share in Malaysia’s power generation to 70% by 2050.
Expressing optimism about raising the necessary investments, Bursa Malaysia and WWF-Malaysia chairman Tan Sri Abdul Wahid Omar stated that it would only constitute 1% of Malaysia’s nominal GDP and could be raised annually through RM15 billion to RM18 billion.
“A significant portion of the investments will be allocated towards decarbonizing the energy sector, especially by halting the production of new coal plants,” he added. Abdul Wahid also mentioned that investments would be directed towards electric vehicles and green hydrogen to reduce carbon emissions in the transportation sector.
According to Abdul Wahid, approximately 60% of the total estimated new energy investments would be commercially viable without any government funding.
Frazrali Ismail, Assistant Governor of Bank Negara Malaysia, revealed that the central bank plans to support these efforts by encouraging “greening finance” and “financing green” practices. He also emphasized the need to assist the banking industry in managing the transition to a green economy by identifying and addressing associated risks.
“To help banks transition towards a green economy, Bank Negara Malaysia will include climate considerations in our supervisory letters,” Ismail explained.
Organized by the Perdana Fellow Alumni Association, the Climate Finance Summit brings together businesses, regulators, financiers, and the public to discuss Malaysia’s role in the global climate narrative.
Credit: The Star : News Feed
