by AFIQ AZIZ / pic by MUHD AMIN NAHARUL
The government is engaging with Bank Negara Malaysia (BNM) and investment banks to discuss the possibility of offering better financial assistance to companies in the renewable energy (RE) space.
Energy, Science, Technology, Environment and Climate Change Minister Yeo Bee Yin (picture) said the RE industry in the country is facing a lack of financial support from financial institutions compared to the conventional energy industry.
“We will have a dialogue at the International Greentech and Eco Products Exhibition and Conference next month with financiers, bankers, investors and BNM on how we can help this industry,” she told reports at the Solar Energy Symposium in Kuala Lumpur yesterday.
The event was organised by The Malaysian-German Chamber of Commerce and Industry.
Yeo said compared to the conventional independent power plant (IPP) projects, which have a long-established and good track record, RE is very new to the market.
“IPPs have a longer track record and low risk, thus the financing is granted at a better rate compared to RE projects,” she said.
“We are looking to accommodate RE firms that have a fair track record and offer financing parity to match the technology parity,” she added.
Yeo said in order for the RE industry to grow further, private capital financiers must be included in the picture, as the industry must not continuously rely on government subsidies.
“We need the government, private capital and a vibrant capital market.
How the government incentives will be made available will be discussed in the dialogue,” she said.
The move is also in line with the Malaysia Electricity Supply Industry reform initiative (MESI Reform 2.0) which advocates to decrease the government’s role in determining tariffs in the electricity sector.
MESI Reform 2.0 will implement strategies in the next three years that would enable market-driven electricity tariffs.
It will be driven by the Malaysia Programme Office for Power Electricity Reform which was reactivated to design and implement the reform programme.
MESI Reform 2.0 aims to line up three major objectives — to increase industry efficiency; to future-proof the industry structure, regulations and key processes; and to empower consumers.