The World Economic Forum in collaboration with Khazanah Nasional Berhad and the Khazanah Research Institute recently published a community report titled “Mobilizing Investments for Clean Energy in Malaysia”.
This comprehensive report was the result of nine months of intense consultation with a diverse working group consisting of participants from both the public and private sector, which included Bintang Capital Partners alongside 50 other Malaysian and international stakeholders from across industry, finance, and academia.
Bintang contributed inputs which were invaluable in identifying key policy and non-policy solutions that could accelerate the energy transition in Malaysia – in particular, Bintang made significant contributions to Solution 3: Harnessing New Pools of Capital for Clean Energy.
Here are the key takeaways from Solution 3:
Malaysia’s pursuit of achieving net-zero greenhouse gas (GHG) emissions by 2050 and reducing GHG emissions intensity of its gross domestic product (GDP) by 45% by 2030 relative to 2005 levels, calls for rapid transformation in the domestic energy landscape.
In tandem with these objectives, the country has recently revised its target to reach a 70% renewable energy capacity in its energy mix by 2050, necessitating an estimated investment of RM637 billion.
Before COVID-19, Malaysia depended less on international financing due to the availability of domestic borrowing. However, increasing fiscal constraints have imposed stricter terms on domestic lending, making international financing a viable option to support Malaysia's clean energy transition.
Bintang and the working group recommended that Malaysia identify appropriate institutions for Green Climate Fund accreditation to facilitate the flow of funds into the country for relevant renewable energy projects and programmes.
Malaysia could consider outsourcing institutional clean energy funds to local private partners, in collaboration with international counterparts, for more dynamic capital deployment.
Benefits of the proposed capital deployment approach under Solution 3 include:
Uncovering investment opportunities that are not currently known to institutional investors.
Attracting foreign capital to Malaysia, potentially through a joint venture between domestic private sector actor(s) and renowned international investors.
Facilitating the transfer of knowledge and skills to Malaysian talent whilst strengthening investment capabilities in Malaysia.
Suggested steps to implement this solution:
Evaluate potential capital allocation sizes available among stakeholders.
Conduct market landscaping to identify potential local and foreign actors as suitable participants.
Initiate a competitive tender/request for proposal process and conduct due diligence to shortlist prospective candidates.
To access the full report, please visit https://shorturl.at/eqJL7.