KUALA LUMPUR: Malaysia will advocate deeper collaboration in green financing, regional energy connectivity and the expansion of sustainable investment frameworks through its chairmanship of Asean.
Deputy Prime Minister Datuk Seri Fadillah Yusoff said Malaysia is also committed to positioning Asean as a global leader in sustainable finance.
“While the Asean taxonomy for sustainable finance is a commendable step forward, we must strive to go further. Sustainable finance regulations should be harmonised across Asean to reduce investor uncertainty and facilitate cross-border capital flows.
“We must standardise green bond frameworks, align ESG disclosure requirements, and enhance carbon credit mechanisms to make cross-border investments in clean energy seamless and efficient,” he told delegates at the 2025 Asean Banking and Finance Summit today.
Fadillah, who is also the Energy Transition and Water Transformation Minister, said the Asean financial sector must lead the transformation, from funding large-scale renewable projects to supporting SMEs in adopting green technologies.
“The decisions we make today will shape the future of our economies, industries, and communities. We have the policies, the mechanisms, and the financial tools to accelerate this transition.
“What we need is collective will. Let us commit – as policymakers, financiers, and industry leaders – to make sustainable financing the bedrock of Asean’s energy future,” he said.
Fadillah pointed out that public financing, while essential, will not suffice.
He said governments can set policies, offer incentives, and provide initial funding, but the scale of investment required demands strong private sector engagement.
“We must strengthen public-private partnerships to share investment risks and accelerate clean energy projects.
“Collaboration between governments, development finance institutions, and private investors can derisk large-scale renewable projects, making them more attractive to capital markets.
“Secondly, blended finance models should be utilised, combining concessional funding with private investment to enhance the bankability of green projects,“ he said.
Fadillah noted that the Asian Development Bank and the World Bank have already committed substantial resources to support Asean’s energy transition. He said these instruments help reduce investment risks and improve access to affordable capital, thereby driving renewable energy growth.
“Thirdly, we must expand carbon markets and transition bonds to unlock new sources of capital while incentivising companies to decarbonise. The global voluntary carbon market is projected to exceed US$50 billion (RM220 billion) by 2030.
“Asean must position itself strategically within this landscape. Companies that fail to adapt will face increased financing costs and restricted market access as sustainability-linked financial instruments become the global norm,” Fadillah said.
Malaysia aims to lead in mobilising sustainable finance through initiatives such as Green Sukuk, Sustainability Bonds and the Corporate Renewable Energy Supply Scheme, he said.
“These are not just policy instruments; they are practical financial tools businesses and investors can leverage to accelerate renewable energy deployment. For Malaysia, our path is clear. We are committed to achieving net zero emissions by 2050, with renewable energy comprising 70% of our energy mix by then.”
Fadillah noted that the National Energy Transition Roadmap outlines strategic pathways, including phasing out coal, expanding solar energy, and modernising Malaysia’s power grids.
“We need people, and industries require financing. Only then can we achieve our goal of meeting the Sustainable Development Goals. More importantly, financing must be both affordable and sustainable. Only with these elements in place can we ensure the security of essential resources, such as energy. This is where our focus must be.
“In Malaysia, in particular, we must be creative and proactive – facilitating industry players by taking the lead in financing and lending,“ he said.
The Asean financial sector holds a pivotal role, and banks, investors and policymakers must collaborate to ensure capital flows into strategic areas such as renewable energy, clean technologies, and sustainable infrastructure, Fadillah said.
