Malaysia could potentially commission its first nuclear power plant between 2040 and 2046, as the country begins the lengthy process of assessing nuclear energy as a firm, low-carbon source of electricity amid rising power demand and energy security concerns, according to CIMB Securities.
In a sector report assessing Malaysia’s nuclear option, CIMB said the country has recently restarted Phase 1 of the International Atomic Energy Agency’s (IAEA) Milestones Approach, with MyPOWER Corp appointed to coordinate the feasibility assessment. The process requires the government to complete feasibility studies and establish a national position before making a knowledgeable commitment to a nuclear programme.
The IAEA estimates that all three phases required to develop nuclear power infrastructure could take 10 to 15 years, although there is no fixed timeline. Assuming Malaysia completes Phase 1 and formally decides to adopt nuclear power by 2030-2031, CIMB estimates another three to four years would be required for regulatory preparation, site assessment, vendor selection and commercial negotiations before construction or fabrication begins.
CIMB said renewed interest in nuclear power comes as the West Asia conflict highlights vulnerabilities in Malaysia’s energy supply while electricity demand is accelerating, partly due to investments in data centres.
Nuclear Offers Firm, Low-Carbon Power
According to CIMB, nuclear energy could provide Malaysia with firm and relatively clean baseload electricity, while using less land than solar photovoltaic projects and reducing exposure to volatile fossil fuel prices.
However, nuclear is neither the cheapest nor fastest new-build clean energy option, given the extensive planning, regulatory requirements and capital involved. Public acceptance also remains an important challenge.
From an ESG perspective, CIMB said Malaysia would need to balance the potential benefits of reliable low-carbon electricity against issues including affordability, safety, radioactive waste, water use, public acceptance and long-term government accountability.
The research house’s readiness assessment shows several areas remain unresolved. No project cost, electricity tariff model or site has been determined, while the owner and financing structure remain undecided. Commercial spent-fuel and disposal arrangements have also yet to be established, alongside funding mechanisms for waste management and eventual decommissioning.
TNB Could Play Key Role
Malaysia has, however, already identified several important institutional players.
MyPOWER has been appointed as the country’s nuclear energy programme implementing organisation, while Atom Malaysia would serve as the nuclear and radiation licensing regulator. Nuklear Malaysia would provide technical expertise and workforce development, while the Energy Commission would oversee electricity market-related matters.
The owner-operator has yet to be determined, but CIMB views Tenaga Nasional Bhd (TNB) as the most logical anchor operator for a future baseload nuclear asset because of its balance sheet and control of the grid. An independent power producer with nuclear expertise could alternatively be involved to reduce project risk.
CIMB said private-sector participation during the initial stages would likely remain limited, apart from TNB’s potential role as the commercial delivery vehicle for a pioneering nuclear project. The research house maintained its BUY call on TNB with a target price of RM15.90, against RM13.90 at the time of the report.
Large Reactors, SMRs And Floating Plants Among Options
Malaysia has yet to settle on a reactor technology, with CIMB identifying conventional large-scale reactors, small modular reactors (SMRs) and floating nuclear power plants as possible options under evaluation.
Conventional reactors offer proven technology and economies of scale above 1,000MW but require substantial upfront investment and lengthy development. SMRs potentially offer lower initial capital requirements and modular expansion, although CIMB noted there are currently no proven commercially viable units demonstrating replicable economics.
Floating nuclear plants could reduce land constraints by locating reactors offshore, but may face complications involving international maritime law.
On ownership, CIMB considers full foreign control unlikely given Malaysia’s established government-linked entities. It suggested a structure similar to the UAE’s Barakah nuclear project could be more suitable, with TNB or another Malaysian project company retaining control while an experienced foreign nuclear supplier takes minority equity and provides turnkey construction and operating support.
CIMB said the ultimate decision should hinge not only on reactor technology but also on who bears the risks of construction cost overruns, delays, operating performance, fuel and waste obligations and long-term electricity tariffs.
For now, Malaysia remains at the assessment stage. CIMB noted that the next major milestones would be a formal commitment to a nuclear programme, followed by development of the regulatory framework, selection of reactor technology and finalisation of ownership and financing models.
