KUALA LUMPUR (Dec 8): The Malaysian government must clearly set its policy priorities and intended outcomes for energy transition before accelerating efforts to mobilise private and multilateral capital, as the financing challenge is one of direction rather than liquidity, said HSBC Bank Malaysia Bhd chief executive officer Datuk Omar Siddiq.
Omar said the energy transition cannot be left to market forces without defined policy guardrails, given the complexity of risk allocation, return thresholds and long-dated financing structures associated with renewable energy generation, storage and transmission projects.
He emphasised that capital is not the constraint as liquidity exists from commercial banks, philanthropic funds and multilateral institutions, but the real challenge is ensuring projects are bankable, risks are transparent and returns are consistent with the country’s transition strategy.
"The government has a role, a strong role to play to determine what are the real priorities that financing should be directed towards,” Omar said during a panel discussion session at the Energy Regulatory Insights 2025 forum on Monday. “If the government can give that clarity of where the priorities lie, then I think we can really effectively get the money in the right place in the right way.”
Omar cautioned that without clear prioritisation, capital may flow toward commercially attractive but low-impact ventures, and that strong policy instruments are needed to direct financing into projects that deliver long-term value for the public.
Blended finance key to de-risking large-scale transition projects
Omar further said that blended financing — combining government incentives, multilateral development support and private capital — will be essential to de-risk large-scale transition projects and make returns viable for investors.
Noting that multilateral institutions such as the Asian Development Bank and World Bank have increasingly signalled readiness to support regional transition efforts, he said their involvement must be aligned with Malaysia’s policy outcomes so that public funds are used to unlock private investment rather than compete with it.
Omar added that blended structures could help bridge the gap between the lower returns required by development finance institutions and the higher returns sought by private investors, particularly in industries that remain early in commercial maturity such as battery storage and grid modernisation.
"We've seen a lot of these things being done in other industries, for example, in the steel industry in Europe and even in Japan, where the shift from coal-based to electric-driven technology was enabled through blended finance — government capital or incentives combined with market off-takers — which allowed billions of dollars worth of projects to proceed," he said.
The panel discussion session, entitled 'Energy in the Context of the Economy, Finance and Society' also featured Deputy Minister of Investment, Trade & Industry Liew Chin Tong, and Adjunct Professor at Taylor’s University and former Deputy Minister of Investment, Trade & Industry Dr Ong Kian Ming.