Malaysia could require between US$852 billion and US$1.1 trillion by 2050 to adapt to climate change, highlighting the scale of financing needed to strengthen the country’s resilience, according to the Securities Commission Malaysia (SC).
SC Chairman Datuk Mohammad Faiz Azmi, citing the World Bank’s Country Climate and Development Report on Malaysia, said climate adaptation was no longer simply an environmental issue but an economic and development necessity.
“This shows that there are structural gaps in our financial architecture that still do not fully recognise the need for adaptation and resilience. The impact is also not distributed equally,” he said in his opening remarks at the SC-AlBaraka Forum Strategic Dialogue in the United Kingdom on Monday.
He said more than half of Organisation of Islamic Cooperation (OIC) member states were assessed as highly vulnerable to climate change while having limited capacity to adapt.
“This is not simply a question of insufficient capital, but of returns because many adaptation and resilience projects are difficult to finance commercially. Such projects have long maturities and limited cash flows of their own. A seawall does not generate income directly. A flood-resilient drainage system may not be used for years,” he said.
Developing countries are expected to require between US$310 billion and US$365 billion annually by 2035 to meet climate adaptation needs, while international public finance for adaptation stood at only US$26 billion in 2023.
This means current financing flows are 12 to 14 times below the estimated requirement.
Mohammad Faiz said mobilising private capital would therefore be critical as the scale of the challenge was beyond the capacity of public resources in individual countries to address alone.
Private capital currently contributes around US$5 billion annually towards climate adaptation, compared with an estimated potential of US$50 billion with appropriate policy support and blended finance structures.
He said blended finance, supported by public-sector participation, concessional funding, long-term capital and risk mitigation mechanisms, could improve project viability, attract private investors and unlock commercial capital at greater scale.
