Malaysia

Competition in green energy market, halal, Islamic finance sectors to be enhance

Five-year plan to drive energy transition, boost agricommodity innovation and expand Malaysia’s role as a global halal and Islamic finance hub

Updated 1 year ago · Published on 31 Jul 2025 3:15PM

Competition in green energy market, halal, Islamic finance sectors to be enhance
Initiatives open the door for more industry players to participate and compete in a healthier and more transparent manner - July 31, 2025

MALAYSIA will introduce an innovative electricity market structure for the first time under the 13th Malaysia Plan (RMK13), with pricing based on the actual cost of energy generation, including renewables.

Prime Minister Datuk Seri Anwar Ibrahim, announcing the plan in Parliament on Thursday, said the move will allow greater industry participation and encourage transparent, competitive practices in the national power supply system.

“This initiative opens the door for more industry players to participate and compete in a healthier and more transparent manner,” he said.

The public will also be empowered to generate renewable energy under an open grid access mechanism through the Community Renewable Energy Aggregation Mechanism (CREAM), he added.

The Government will expedite investments in green energy through the National Energy Transition Facility Fund and the Corporate Green Electricity Supply Programme.

“Private sector involvement will strengthen the entire sustainable energy value chain,” Anwar noted.

Aligned with the National Energy Transition Roadmap (NETR), the Government will also develop a battery energy storage system (BESS), smart grid solutions and an interconnection project linking Sarawak’s electricity supply with Peninsular Malaysia.

Floating solar-hydro hybrid installations and a green hydrogen hub in Kenyir will be expanded as integrated green energy models. The Government is also considering nuclear energy as a safe and competitive clean energy source.

To ensure long-term energy security, a third regasification terminal will be built in Lumut, Perak.

Beyond energy, RMK13 outlines Malaysia’s ambition to enhance high-impact sectors including agricommodities, the halal industry, and Islamic finance.

Anwar said the Government would improve productivity in palm oil, rubber and cocoa through mechanisation, automation, robotics, and investments in research, development, commercialisation and innovation (RDCI).

“This will improve operational efficiency while reducing reliance on foreign labour. We must move towards sustainability and efficiency in every industrial segment,” he said.

Malaysia is also aiming to raise halal exports to RM80 billion by 2030, with the sector’s contribution to GDP expected to grow to 11 percent. This target will be supported by the establishment of the Malaysian Halal Commission and the development of Halal Industrial Parks in Melaka, Perak and Kelantan.

The Government will strengthen the financial services sector by focusing on digitalisation, including the adoption of asset tokenisation, central bank digital currencies and cryptocurrencies.

Regulatory sandbox platforms will be expanded to test financial innovations in a secure environment, while blended finance mechanisms will be scaled up to increase capital access for businesses.

The Government will also promote equity-based financing through venture capital in line with the Malaysia Venture Capital Roadmap (MVCR), with the Strategic Co-Investment Fund (CoSIF) under the New Industrial Master Plan (NIMP 2030) continuing to drive investments in high-value, high-tech sectors.

As part of its vision to establish Malaysia as a global Islamic finance hub, the Government will roll out a new Financial Sector Blueprint and a capital market master plan.

“Efforts will focus on building a sustainable, innovative and inclusive capital market, including through international collaboration via the Malaysia International Islamic Financial Centre (MIFC),” Anwar said.-  July 31, 2025

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