Kuala Lumpur: Malaysia has urged ASEAN member states to embrace a fundamental shift in financing strategies to achieve the region’s ambitious energy transition goals, with cumulative investments estimated at over US$3 trillion by 2050. Deputy Prime Minister Datuk Seri Fadillah Yusof emphasized the necessity of these changes during his keynote address at the ‘Energy Transition Meeting in ASEAN: Fostering Regional Cooperation’ conference.

According to BERNAMA News Agency, Fadillah highlighted that Malaysia alone requires more than US$143 billion to meet its renewable energy targets under the National Energy Transition Roadmap. He stated that public finance alone is insufficient, underscoring the importance of creating a robust environment for catalyzing private investment through coordinated policy reform and innovative financial instruments.

Fadillah proposed the use of blended finance mechanisms and public guarantees to mitigate risks in early-stage renewable energy projects. He also advocated for strengthening ASEAN’s capital markets through green bonds, Islamic finance instruments like sukuk, and sustainability-linked loans to channel capital into clean energy projects. Additionally, he emphasized the need for carbon pricing frameworks to incentivize the shift toward low-carbon technologies.

At the national level, Malaysia is aligning its policies and financing landscape to support this transformation. Fadillah noted initiatives such as the Corporate Renewable Energy Supply Scheme and the Low Carbon Energy Generation Programme, which offer market-driven routes to decarbonization and improve the bankability of renewable projects. Bank Negara Malaysia’s Low Carbon Transition Facility also provides concessional financing to SMEs investing in clean technologies.

Fadillah stressed that regional alignment is essential for a successful energy transition across ASEAN. He called for a well-integrated ASEAN energy market supported by common investment frameworks, harmonized technical standards, and coordinated green finance mechanisms to unlock economies of scale and reduce capital costs.