Malaysia through ASEAN Chairmanship will advocate for deeper collaboration in green, sustainable investment frameworks - DPM Fadillah

KUALA LUMPUR: Malaysia is committed to positioning ASEAN as a global leader in sustainable finance and will advocate for deeper collaboration in green financing, regional energy connectivity, and the expansion of sustainable investment frameworks.

Deputy Prime Minister and Minister of Energy Transition and Water Transformation Datuk Seri Fadillah Yusof said ASEAN's energy transition cannot occur in isolation and that no country can achieve its sustainability goals without strong regional cooperation.

"The depth of our collaboration will determine how swiftly and effectively we decarbonise our economies while safeguarding energy security and affordability.

"While the ASEAN Taxonomy for Sustainable Finance is a commendable step forward, we must strive to go further," he said in his keynote opening address titled 'Sustainable Financing for Energy Transition' at the 2025 ASEAN Banking and Finance Summit here today.

ASEAN requires an estimated US$1.5 trillion in climate investment by 2030 to align with global sustainability goals, according to the International Energy Agency (IEA).

Fadillah, meanwhile, said 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 environmental, social, and governance (ESG) disclosure requirements, and enhance carbon credit mechanisms to make cross-border investments in clean energy seamless and efficient.

"The financial sector must lead this transformation. From funding large-scale renewable projects to supporting small and medium enterprises (SMEs) in adopting green technologies, financing solutions must be innovative, inclusive and accessible to all," said Fadillah.

He also stressed on the importance of strengthening public-private partnerships (PPPs) to share investment risks and accelerate clean energy projects; utilise blended finance models by combining concessional funding with private investment to enhance the bankability of green projects; and expand carbon markets and transition bonds to unlock new sources of capital while incentivising companies to decarbonise.

He said Malaysia has already taken bold strides in this direction, where the country is enhancing green investment incentives, expanding green sukuk offerings, and improving corporate access to renewable energy through the Corporate Renewable Energy Supply Scheme (CRESS).

Additionally, through Energy Exchange Malaysia (ENEGEM), Malaysia is leading regional integration efforts, facilitating cross-border renewable energy trade, including with Singapore, and ensuring that capital flows efficiently, he said.

Elaborating on the role of the banking and financial sector, Fadillah said it is no longer solely about lending, it is about leading with structured financial solutions, de-risking green projects, and supporting businesses in their transition towards sustainability.

"With new technologies that are coming in... the financial sector have to lead and facilitate.

"No longer about traditional banking system, you have to be creative and innovative, so that it will suit the requirements of industry players, the direction of government, direction of the world. Otherwise if you go by conservative approach, there's no lending.

"More importantly it has to be affordable, and it has to be sustainable, and then only there'll be security in terms of supplies, of energy and so on," he added.

-- BERNAMA

Read the latest news here