In a pivotal announcement, Prime Minister Datuk Seri Anwar Ibrahim has disclosed the government’s allocation of RM2 billion as seed funding for the establishment of the National Energy Transition Facility (NETF). The unveiling took place during Anwar’s keynote address at the inauguration of Phase 2 of the National Energy Transition Roadmap (NETR), a comprehensive strategy guiding Malaysia’s transformative journey towards sustainable energy.
During his address, Anwar emphasized the critical importance of the RM2 billion allocation, particularly in the context of Malaysia’s burgeoning decarbonization technologies. He underscored that the allocation serves as a pivotal enabler for the nation’s progress, given its nascent yet promising foray into alternative energy solutions. Anwar articulated that the success of Malaysia’s energy transition hinges upon embracing alternative energy sources and cultivating robust collaboration on regional and international fronts.
Of paramount significance, Anwar acknowledged the monumental financial requisites entailed in this ambitious transition. He projected that a staggering investment of no less than RM1.2 trillion spanning the years 2023 to 2050 would be requisite to effectuate a responsible and comprehensive energy transition. The Prime Minister brought to the fore the financial complexities intrinsic to this undertaking, underlining the criticality of financial resources in steering the transition’s success.
Anwar articulated the distinct financial challenges of the current decade. He cited an impending need for the government to allocate between RM60 billion and RM90 billion for pivotal projects, encompassing endeavors such as public transportation expansion, bolstering grid infrastructure, and the reskilling of human capital. As a direct response to this demand, the government’s decision to dedicate RM2 billion as seed funding for the NETF reflects a proactive and strategic commitment to facilitating sustainable transformation.
The NETF, Anwar elucidated, will serve as a catalytic force in generating blended finance solutions. This approach will ensure the unhindered flow of financial resources towards energy transition projects that may be considered marginally bankable or yield below-market returns. Anwar spotlighted specific domains where these resources would be channeled, including investments in the electric vehicle (EV) value chain, hydrogen technology, and carbon capture, utilization, and storage (CCUS) technologies.
In his comprehensive vision, Anwar underscored the government’s determination to ensure holistic energy planning and policy development. He announced the activation of the National Energy Council, a pivotal oversight entity poised to monitor and navigate the trajectory of the NETR’s progress.
With reference to the broader context, Anwar revisited Malaysia’s target of achieving a remarkable 70% renewable energy installed capacity by the year 2050. He reminded the audience that earlier this year, the government had also lifted the prohibition on cross-border trade in renewable energy. This strategic maneuver aimed at fostering a regional ecosystem for renewable energy exchange and collaboration.
As a tangible step towards achieving this objective, Anwar announced the imminent establishment of a renewable energy exchange, slated to be operational in 2024. This platform, envisaged as a market aggregator, will facilitate not only price discovery but also the monetization of surplus power.