Budget 2025 Expected to Accelerate Malaysia’s Renewable Energy Shift

Certain initiatives are expected to be introduced in the upcoming Budget 2025 that could facilitate investments toward sustainable energy solutions and fast forward the progress for companies to transition into renewable energy (RE).

Such efforts include the implementation of competitive green bonds or tax breaks and rebates, which could help to offset the high upfront costs that industry players have to face and encourage them to adopt clean energy sources like solar, wind and hydrogen.

“Other initiatives that should be considered includes a cash-back programme for environmental, social and governance (ESG) initiatives, similar to those for electric vehicle (EV) purchases.

“This may attract telecommunication companies to integrate sustainability practices, which aligns with the nation’s green goals,” Edotco Group Sdn Bhd chief executive officer Mohamed Adlan Ahmad Tajudin said, adding that an improvement in access to green bonds and competitive financing options for RE projects could also be considered.

“This would provide the necessary financial support while driving companies to enhance transparency and sustainability efforts, motivating boards to take more decisive action on ESG initiatives,” Adlan opined.

Malaysian telco companies are currently facing a rise in energy consumption costs due to a growing demand for network accessibility, despite being posed with certain challenges.

RE solutions such as solar still poses certain challenges such as the geographically dispersed nature of telecommunication networks, making it difficult to achieve economies of scale with energy-efficient solutions, aside from the fact that there is a limited availability to sustainable green energy sources.

At the same time, Adlan said he welcomes frameworks that encourage telecommunication companies to participate in large-scale solar (LSS) projects and energy efficiency programmes which will enable the sector to reduce its carbon footprint while maintaining operational efficiency.

“By enabling telecommunication companies to engage in supply agreements (SSAs) collectively, it could make the agreements more attractive to solar power producers (SPPs), fostering competitive pricing that benefits both parties,” he added.

Furthermore, Adlan said that the collective approach would also accelerate the industry’s RE adoption, aligning with Malaysia’s sustainability goals while ensuring cost-effective energy solutions for telecommunication.

Apart from the solar energy sector, the gas industry also calls for allocation from the Budget 2025 as it still plays a pivotal role in Malaysia’s National Energy Transition Roadmap (NETR) to ensure the country is successful in its sustainable transition to a low-carbon economy.

Having that in mind, the Malaysian Gas Association (MGA) president Abdul Aziz Othman said it would be reasonable for the gas industry to be accorded incentives similar to those given to the RE industry, considering the heightened expectation on the role and contribution of gas.

“This includes tax incentives, grants and funding that encourage continued and enhanced investments and development within the gas industry,” he said, adding that funding is a critical element that ensures the NETR targets are achieved.

Furthermore, Aziz Othman noted that there were stricter requirements and limitations on fund allocation for oil and gas-related projects. Based on the current trends in project funding and financing, he foresees the situation to get even tougher for the industry.

Hence, MGA calls for an immediate government intervention to reverse the concerning pattern by encouraging financial institutions to recognise the strategic importance of gas projects and provide sufficient support to the gas industry.

This includes allocation of sufficient funds to support gas-related investments and fair treatment of gas-related investments to achieve the NETR targets.

The association also urged the government and financial institutions to recognise the strategic importance of gad projects and provide the necessary support to the industry.

The post Budget 2025 Expected to Accelerate Malaysia’s Renewable Energy Shift first appeared on Energy Asia.

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