Minister says the roadmap is designed to propel Malaysia to become the green financing hub in the region

By RAHIMI YUNUS

The government is expected to introduce a green financing roadmap next year as part of its initiative to spur green investment and ecosystem in the country.

Energy, Science, Technology, Environment and Climate Change Minister Yeo Bee Yin (picture) said the government is formulating the new roadmap which is expected to be ready by the third quarter of next year.

“The renewable energy (RE) agenda will not be successful if it is driven and funded top-down by the government. We wanted more and more private investments into our green infrastructure projects,” Yeo said at the eighth National Energy Forum 2018 in Kuala Lumpur yesterday.

Yeo said the green financing roadmap is also designed to propel Malaysia to become the green financing hub in the region, while creating business opportunities for local industry players.

The recent Budget 2019 has allocated RM2 billion for the Green Technology Financing Scheme to incentivise investments in green technology that include the government subsidising the interest cost by 2% for the first five years.

The Malaysian Reserve previously reported that environmentally friendly projects — particularly the development of RE plants — are still facing difficulties in securing fiscal assistance from financial institutions in the country due to the uncertainties and risk factors involved.

Malaysia has also been envisioned to achieve a 20% RE (excluding hydro) contribution into the nation’s electricity generation mix by 2025 from the current level of 2%.

The plan would equate to introducing some 4GW of REs into the country’s grid in the next seven years.

Yeo said the government is optimistic that the target is achievable, based on the vigorous measures that have been introduced to facilitate the growth of RE.

Among the initiatives include the enhancement of Net Energy Metering programme; reviewing and expanding the Feed-in Tariff (FiT) programme by opening up 114MW of FiT RE quota; and opening the third round of the large-scale solar programme for an additional 500MW capacity.

The country is also committed to the Paris Agreement to reduce greenhouse gas emissions intensity by at least 35% in 2030 from the 2005 level (optional of additional 10% upon technology transfer and international funding), and eventually heading for carbon-neutrality by the 2050.

Meanwhile, Energy Commission chairman Datuk Ir Ahmad Fauzi Hasan said coal is not preferable as the country moves to clean energy.

That spells a bleak future to the life of current coal-fired power plants in the country, especially on facilities that are nearing “retirement”.

Yeo said the government is currently drafting the Energy Efficiency and Conservation Act and reviewing the National Energy Efficiency Action Plan 2016-2025.

The government has also introduced a solar leasing concept which allows homeowners to instal solar panels on the roof without any upfront cost, to push residential solar take-up rate.

Additionally, Yeo said Malaysia will set up a climate change centre next year to devise mitigation and adaptation plans for the country in the face of climate changes that affect the weather, temperature and shorelines.

She said the government is also working on risk analytics and carbon calculator to better prepare the country for climate change.