RE Investment Series – Malaysia
Wednesday, 27 May 2020

Category

Policy Brief

Author

Roman Vakulchuk, Hoy-Yen Chan, Muhammad Rizki Kresnawan, Monika Merdekawati, Indra Overland ,
Haakon Fossum Sagbakken, Beni Suryadi, Nuki Agya Utama, Zulfikar Yurnaidi

Key Points

Malaysia set a target of 20% renewables in the energy mix by 2025, an 18% increase from the 2% it had in 2018 . One of the planned measures is the development of large-scale solar power . To reach the target, it will be necessary to attract a total of USD 8 billion of renewable energy investment during this period . Considering the fact that Malaysia attracted only USD 2.5 billion from 2006 to 2018, the country will need to attract USD 1.3 billion on average every year from 2019. To achieve this, it will need to undertake serious reform measures to improve the investment climate for renewables and conditions for renewable energy deployment. Given the ever-increasing global competi-tion for renewable energy investment, the rapid implementation of such reforms becomes an imperative. This in turn requires strong governance. Malaysia is ranked no 114 out of 156 countries in the Index of Geopolitical Gains and Losses after energy transition (GeGaLo Index) and thus needs to improve its capacity for renewable energy governance if it does not want to fall behind .With this background, we propose five actions that can improve the attractiveness of Malaysia’s investment climate for renewable energy to 2025 and beyond.

Action plan to attract investment in renewable energy in Malaysia

  • Reform energy governance in favour of renewable energy
  • Ensure streamlined management of the regulatory framework for renewable energy
  • Develop a framework for easier grid connection and use
  • Enhance awareness-raising measures for investors
  • Make market entry easy and attractive

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