Malaysia will continue to push its energy transition agenda, the country’s Prime Minister Anwar Ibrahim said last Friday.

He said in a speech during the Budget 2026 that the National Energy Transition Roadmap (NETR) has set a target of 70 percent of electricity generation capacity from renewable energy (RE) sources by 2050.

“The NETR continues to be driven by industry players with the support of the National Energy Transition Fund of MYR 150 million ($35.51 million),” he said.

Meanwhile, he noted the large-scale solar (LSS) generation project is being implemented with a capacity of almost 2 gigawatts under the LSS 6 Program, involving an estimated private investment of MYR 6 billion ($1.42 billion).

Government-Linked Investment Companies (GLICs) and government-linked companies (GLCs) are mobilizing investments worth MYR 16.5 billion ($3.91 billion) for 2026, he added.

For example, UEM Lestra is developing solar farms in Segamat (Johor), Melaka and Selangor as well as collaborating with PLUS to expand EV charging facilities.

Anwar also highlighted that RE sources from biogas, biomass and small hydropower will be increased through an additional quota of 300 megawatts under the feed-in tariff program with operations expected to commence as early as 2028.

In addition, the Corporate Renewable Energy Scheme (CRESS) is expected to generate investments amounting to MYR 3.5 billion ($830 million) through the registration of companies that will generate 500 megawatts of energy.

It is noted that to date, the installation of solar photovoltaic systems at the Parliament of Malaysia, Ministry of Home Affairs (MOHA) and Ministry of Defence (MINDEF) buildings as well as several Armed Forces camps has generated a combined capacity of nearly 7.8 megawatts, reducing electricity bills by up to 42 percent, with the Parliament of Malaysia alone achieving savings of 22 percent.

“The Solar Accelerated Transition Action Program (Solar ATAP) allows consumers to generate energy for their own use as well as sell surplus energy to utility companies as offset in electricity bills,

“This opens up opportunities for consumers to contribute to increasing RE generation through solar installations with a capacity of up to 500 megawatts,” he said.

Meanwhile, the Green Technology Financing Scheme, GTFS 5.0 is open until 31 December 2026 with a government guarantee incentive of up to 80 percent for green technology in the waste sector and a guarantee of up to 60 percent for other sectors such as energy, water, transport and manufacturing with a financing value of MYR 1 billion ($240 million).

Anwar also said the Carbon Tax will be introduced starting next year, with an initial focus on the iron, steel and energy sectors.

“To ensure efficient implementation of the Carbon Tax, its 85 mechanism will be aligned with the National Carbon Market Policy and the upcoming Climate Change Bill,” he said.

Analysts foresee strong momentum ahead for Malaysia’s renewable energy sector