Malaysia is committed to positioning ASEAN as a global leader in sustainable finance and is pushing 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 happen in isolation, stressing that no country can achieve 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 address titled Sustainable Financing for Energy Transition at the 2025 ASEAN Banking and Finance Summit today.
According to the International Energy Agency (IEA), ASEAN requires an estimated US$1.5 trillion in climate investment by 2030 to align with global sustainability goals. Fadillah emphasised the need for harmonised sustainable finance regulations 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,” he added.
Fadillah also highlighted the importance of strengthening public-private partnerships (PPPs) to share investment risks and accelerate clean energy projects. He called for the use of blended finance models, combining concessional funding with private investment, to enhance the bankability of green projects.
Expanding carbon markets and transition bonds, he said, would unlock new sources of capital while incentivising companies to decarbonise.
Malaysia has already made significant progress, enhancing green investment incentives, expanding green sukuk offerings, and improving corporate access to renewable energy through the Corporate Renewable Energy Supply Scheme (CRESS). Additionally, Malaysia is leading regional integration efforts through Energy Exchange Malaysia (ENEGEM), facilitating cross-border renewable energy trade, including with Singapore.
Elaborating on the role of the banking and financial sector, Fadillah said it is no longer just about lending but about leading with structured financial solutions, de-risking green projects, and supporting businesses in their transition to sustainability.
“With new technologies that are coming in… the financial sector has to lead and facilitate.
“No longer about traditional banking systems, you have to be creative and innovative so that it will suit the requirements of industry players, the direction of government, the direction of the world. Otherwise, if you go by a 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 said.
