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Malaysia has reaffirmed its commitment to positioning ASEAN as a global leader in sustainable finance, advocating for deeper regional collaboration in green financing, energy connectivity, and the expansion of sustainable investment frameworks. Deputy Prime Minister Fadillah Yusof, who also serves as Energy Transition and Water Transformation Minister, emphasized the need for collective action, stating that ASEAN’s energy transition cannot happen in isolation. Speaking at the 2025 ASEAN Banking and Finance Summit, Fadillah stressed that no single country could achieve its sustainability goals without robust regional cooperation. “The depth of our collaboration will determine how swiftly and effectively we decarbonize our economies while safeguarding energy security and affordability,” he said in his keynote address. While acknowledging the progress made through the ASEAN Taxonomy for Sustainable Finance, Fadillah urged for further advancements to enhance the region’s financial ecosystem for green investments. US$1.5 Trillion in Climate Investment Needed by 2030 Citing data from the International Energy Agency (IEA), Fadillah highlighted that ASEAN requires an estimated US$1.5 trillion in climate investment by 2030 to align with global sustainability goals. He called for harmonized sustainable finance regulations across ASEAN to reduce investor uncertainty and facilitate seamless cross-border capital flows. “We must standardize green bond frameworks, align environmental, social, and governance (ESG) disclosure requirements, and enhance carbon credit mechanisms to ensure efficient and seamless clean energy investments,” he stated. Fadillah underscored the financial sector’s pivotal role in driving this transformation, urging banks to go beyond traditional lending and actively support large-scale renewable energy projects and small and medium enterprises (SMEs) in adopting green technologies. Strengthening Public-Private Partnerships for Green Growth To accelerate clean energy initiatives, Fadillah highlighted the importance of public-private partnerships, blended finance models, and the expansion of carbon markets and transition bonds. He stressed that sharing investment risks through such collaborations would unlock new sources of capital and incentivize companies to decarbonize. Malaysia, he noted, has already taken bold steps in this direction by enhancing green investment incentives, expanding green sukuk offerings, and improving corporate access to renewable energy through the Corporate Renewable Energy Supply Scheme. Additionally, Energy Exchange Malaysia has been spearheading regional integration efforts by facilitating cross-border renewable energy trade, including partnerships with Singapore. Financial Sector’s Role in Driving Sustainable Growth Fadillah also underscored that the role of the banking and financial sector extends beyond conventional lending, urging financial institutions to innovate and offer structured financial solutions that de-risk green projects and support businesses transitioning toward sustainability. “With new technologies emerging, the financial sector must lead and facilitate rather than simply follow traditional banking models,” he said. He further emphasized that sustainable financing solutions must be both affordable and accessible to ensure long-term energy security and economic resilience across ASEAN. As ASEAN moves towards a low-carbon future, Malaysia continues to champion regional cooperation, reinforcing its commitment to building a more integrated and sustainable financial ecosystem. |
