KUALA LUMPUR (April 9): Bank Negara Malaysia (BNM) needs to adjust the maximum exposure a bank can have with a single customer to ensure Malaysia’s energy transition has sufficient funding to support it.

The current limit does not account for the surge in data centre capacity, which has lifted total energy transition funding requirement, according to CIMB Islamic Bank Bhd head of sustainable finance Arshad Nuval Othman.

Data centre surge is lifting total energy demand by more than five gigawatts in the next few years. At the same time, it is also raising expected demand for renewable energy projects, which require a more resilient grid to handle the intermittency, such as a surge in solar power in daytime and its complete absence at night without battery storage.

“A bank can only lend up to 25% of its equity to a single customer. This was based on the NETR (National Energy Transition Roadmap) at the time to solve the financing required up to 2050,” Arshad said during a panel session at the Malaysia Energy, Water & Climate Change Summit 2026 organised by KSI Strategic Institute for Asia Pacific on Thursday.

“What was not accounted for was the boom in data centres that changed the energy requirement,” he noted.

A BNM exposure draft in December 2024 proposed shifting the capital base for the 25% limit to Tier 1 capital from a bank's total capital. 

Tenaga Nasional Bhd (KL:TENAGA) and Petroliam Nasional Bhd (PETRONAS) are exceptions, with an additional limit of 10% permitted.

This means one bank can provide financing amounting to 35% of its total equity each to TNB and PETRONAS. However, this is not enough as the new landscape data centre-induced demand jump has yet to be accounted for.

“We need to adjust it. Otherwise, we will run out of that headroom to finance the energy transition, because data centres will take it up faster than expected,” Arshad said.

BNM’s exposure draft took feedback until end-March 2025, and the changes are expected to come into effect at varying dates, subject to a final policy document.  

The NETR pegged an expected investment of RM1.2 trillion to RM1.3 trillion by 2050 to achieve its goals. The national policy document did not account for the energy requirements of the surge in data centres, which began in late 2024 and was most prominent in 2025. 

The NETR aims to see renewable energy’s share of the energy mix rise to 70% by 2050, as well as net-zero emissions by 2050.