KUALA LUMPUR (Aug 29): The Malaysian government will allocate RM2 billion as the seed fund to finance marginally bankable energy transition projects or those yielding below-market returns, such as electric-vehicle charging, hydrogen and carbon capture technologies.
Prime Minister Datuk Seri Anwar Ibrahim revealed this when announcing the setting up of the National Energy Transition Facility (NETF), part of efforts to support the second phase of the National Energy Transition Roadmap (NETR) launched on Tuesday.
“Considering Malaysia’s current state of immature decarbonisation technologies, our progress will significantly hinge on alternative energy sources and robust regional and international collaboration,” Anwar said when launching the NETR at the Energy Transition Conference 2023 here.
The facility, he said, will enable “catalytic blended finance” to ensure a seamless flow of financial resources towards energy transition projects.
“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 including, among others, expansion of public transportation, strengthening grid infrastructure, and reskilling of human capital,” he added.
Earlier, Economy Minister Mohd Rafizi Ramli said the government will co-investing in key projects through the NETF, either as concessional capital, development financial institutions, or to actively develop bankable project pipelines through technical assistance.
“The NETF is not just another facility that houses government investments,” Rafizi said.
“Instead, the facility will adopt an innovative blended finance instrument that combines funding from public, private, and philanthropic channels. At the heart of it, the blended finance instrument is meant for the government's seed investment to mobilise additional private capital that triples or quadruples the initial seed amount,” he added.