KUALA LUMPUR, JUNE 22 — The encouraging response to two Islamic bond issuances by Tenaga Nasional Bhd (TNB) totaling RM2.5 billion for energy transition projects shows that Malaysia is in a strong position to lead the financing of energy transition in the region.
TNB’s new Chief Energy Officer, Mohd Zarihi Mohd Hashim, said the two sukuk issuances in 2026, which included RM1 billion for a solar project in May and RM1.5 billion for a hydro project in March, were each oversubscribed five times.
He said that TNB’s recent experience illustrates this trend, showing that there is a huge demand from investors that is increasing regionally and globally.
“This achievement shows that investors are very interested in renewable energy assets (REAs) that are well-prepared and bankable, supported by a clear structure and solid business partners,” he said.
Mohd Zarihi shared his views on how Malaysia can channel available funds into well-structured projects to support the country’s aspirations to achieve net zero carbon emissions, at the Energy Transition Conference 2026 (ETCon26) held recently.
He said the National Energy Transition Roadmap (NETR) estimates financing needs of RM1.2 trillion to RM1.3 trillion over the next 25 years or approximately RM50 billion per year.
Globally, US$2.3 trillion has been channeled into energy transition projects by 2025, demonstrating that the availability of capital is not a major constraint.
Mohd Zarihi said that the panel discussion session held at ETCon26 concluded that the more pressing challenge lies in the speed and scale of project implementation.
Projects require stronger preparation, clearer contractual arrangements and stable policy signals to enable capital to be invested more efficiently.
Risk-sharing mechanisms, including blended financing, are expected to play an important role, especially among small developers and new technologies, he said.
The encouraging response to TNB’s two sukuk issuances indicates strong demand among investors.
The high interest reflects the institution’s confidence in the utility company’s energy transition initiatives as well as NETR’s target to achieve net zero emissions by 2050.
Energy transition financing includes renewable energy projects such as solar and hydro, green hydrogen, carbon capture, energy efficiency, electric mobility advancements and energy-related initiatives.
Mohd Zarihi said that financing for energy transition projects is growing rapidly, placing greater emphasis on whether the project can be financed by banks and is ready to receive investment capital.
Commenting on Malaysia’s readiness to be a leader in financing the energy transition in the region, he said that the regulatory framework and climate-related guidelines have been put in place while the capital market has shown support for transition-focused instruments.
“The priority at this time is to accelerate the channeling of capital into bankable projects, resilient infrastructure and large-scale implementation that support the country’s transition aspirations,” he said.
— BERNAMA
