MALAKOFF Corp Bhd, an energy, environment and waste management company that has been around for almost half a century, is evolving with the country’s needs to keep up with the times.

Established in 1975, Malakoff has been primarily an independent power producer (IPP) since 1993, with long-term power purchase agreements (PPAs) to deliver a secure and reliable electricity supply for Malaysia.

With the numerous environmental challenges that ail the world today, sustainability has become a priority for everyone, from policymakers to end-users. This has prompted Malakoff to refine its purpose to kick-start and implement a holistic transformation journey, through which it will pivot to emphasise on renewable energy (solar, small hydropower, battery energy storage system, biomass, carbon-free mobility infrastructure) and environmental solutions businesses.

The Malakoff 2.0 strategic transformation, which began in September 2021, represents the company’s third iteration. The company started as a plantation company, which later evolved into an IPP when it ventured into the power sector driven by the surge in the country’s electricity demand. The latest change will reposition Malakoff as an environmental, social and governance-centric organisation focused on clean and renewable energy and environmental solutions.

“The urgency of tackling global environmental issues, particularly those related to climate change and waste management, has prompted the company to embark on this comprehensive transformation. Since Malakoff is already in the energy, environment and waste management businesses, it was a natural extension for the company to evolve existing businesses into high-growth sectors that will also contribute to a more sustainable environment,” Managing Director and Chief Executive Officer Anwar Syahrin Abdul Ajib said.

The fact that its PPAs will expire in the next few years also gave the company an opportunity to transition its plants to cleaner energy sources and plug the earnings gap with new growth projects.

Malakoff’s renewed direction has steered it to diversify its portfolio of businesses with a greater emphasis on RE and comprehensive environmental solutions by creating three new business pillars:

These new business pillars will contribute towards Malaysia’s own environmental aspirations of achieving carbon neutrality by 2050; having a national recycling rate of at least 40% by 2025; and having RE comprise 70% of the country’s installed capacity by 2050.

For Malakoff, its own goals are to increase its RE capacity to 1,400MWp by 2025 and achieve a 15% to 20% recycling rate from waste collected by subsidiary Alam Flora Sdn Bhd. The company also aims to reduce its greenhouse gas emissions intensity by 30% by 2031 and, ultimately, become a net-zero emissions organisation by 2050.

“We recognise that these are quite ambitious targets, but we are confident of achieving them, given our conviction that growing sustainably is not just the responsible thing to do but represents Malakoff’s most viable option,” Anwar Syahrin said.

“Moreover, we believe Malakoff, as an organisation, is sufficiently nimble and our people are agile enough to take the lead in Malaysia’s energy transition as we adapt our business to environmental imperatives. Speaking of people, I can’t stress enough the importance of building human capital in achieving our transformation targets.

“Everything from company culture to internal workflow systems and procedures heavily impacts employee well-being, along with our ability to harness our talent in the workforce. As a performance-driven company, we continue to place a stronger focus on the nuances of developing and managing our people, as we want to bring out their best and channel their efforts into results.”

Malaysia is going through an energy transformation journey. This was made evident through the recently launched National Energy Transition Roadmap (NETR), which shows the RE capacity that Malaysia has committed to including in its energy mix by 2050 has been stretched to 70%, from 40% initially.

One way Malakoff is supporting Malaysia’s energy transition is by decarbonising its existing plants using biomass co-firing. As part of this effort, the 2,100MW Tanjung Bin Power Plant will blend biomass with coal in its operations, showcasing a notable example of boosting biomass demand.

The government’s recent announcement is expected to draw even more demand for solar energy in the near future because it is not only friendlier to the environment but also allows consumers to reduce their monthly electricity costs by using rooftop solar panels to produce their own power.

Furthermore, there is also a relaxation of conditions for Net Energy Metering and Self-Consumption for Solar Photovoltaic Installation (SelCo), allowing the increase of capacity from 75% to 85% for both programmes. This will likely to bolster demand for solar energy, as both initiatives will allow consumers to rely less on the national grid, simultaneously reducing their electricity bills.

“This is where Malakoff comes in. Through SelCo, our newly established business pillar, Malakoff Green Solutions, will not only help consumers, businesses or individuals install solar PV but also provide a battery energy storage system application that acts as a power storage, because any excess energy from their renewable energy sources will not be allowed to be transmitted to the national grid,” Anwar Syahrin said.

In line with the government’s aim to make adopting clean energy financially relevant, Malakoff has formed a partnership with Bank Muamalat, through which it will provide financing options for businesses and individuals keen to adopt RE.

The government’s initiative to deploy the Corporate Green Power Programme where corporate consumers are allowed to virtually purchase solar energy from solar developers, will further encourage companies to achieve their own sustainability or green energy goals in a much more accessible way.

“We are exploring solar greenfield projects to be developed, where we can sell the solar energy to off-takers, which in this case would be other corporates looking to accumulate their Renewable Energy Certificate points to be traded at some point. In a way, we are helping other companies that don’t have access to green energy to achieve their sustainability goals,” Anwar Syahrin said.

“We are also looking to expand our presence in the small hydro space, as this type of hydropower plant avoids excessive water storage, whereby the water is collected from the river. Therefore, it can provide uninterrupted electricity to off-grid homes and off-grid ranches. It is also the most cost-effective energy source for off-grid power generation and non-intrusive in relation to building space. Hydropower plants have been proven to be the cleanest low-carbon alternative, offering the lowest greenhouse gas emissions per unit of electricity generated.”

Malakoff is in the midst of developing three small hydropower plants with a total capacity of 84mw in Kelantan. The company has just done its financial closing in July, and this project is a key growth area in its RE portfolio which is aligned with the Malaysia Renewable Energy Roadmap to leverage hydropower’s full potential as one of the technology-specific pillars towards achieving a low-carbon economy.