RAM positive on Malaysia

Published on 25 May 2026.

Share Tweet Email

RAM Ratings maintains a positive outlook on Malaysia’s power sector as the country’s energy transition gains momentum. Malaysia’s execution of its net zero ambition is increasingly gaining traction, supported by strong regulatory backing under key national frameworks, including the National Energy Transition Roadmap and state-level roadmaps.

RAM’s special commentary released today, Power Insight: Advancing Sustainable Energy Transition, evaluates Malaysia’s progress in energy transition and tracks up-to-date key information on various sector initiatives.

“As of end-December 2025, renewable energy (RE) constituted 12 GW or 31% of total installed capacity, putting the country on track towards its interim targets of 40% by 2035 and 70% by 2050. Sustained progress will hinge on policy continuity, disciplined execution, effective stakeholder coordination, and continued access to long-tenured financing,” notes Chong Van Nee, Senior Vice President, Infrastructure and Utilities Ratings at RAM.  

Malaysia’s RE sector is evolving rapidly, led by utility-scale solar photovoltaic capacity additions and the early deployment of grid-scale battery energy storage systems to address intermittency and strengthen grid system stability. New gas-fired plant-ups are expected to provide firm capacity as coal-fired plants are gradually decommissioned, while feasibility studies on emerging low-carbon sources, including nuclear power, could further diversify the energy generation mix. Against this backdrop, a robust pipeline of around 20 GW of new power plant capacity is scheduled for commissioning nationwide by 2030.

Malaysia’s debt capital market is well positioned to fund the sector’s RE capacity expansion and grid upgrades. In 2025, the power sector raised RM9.2 billion in green, social, sustainability and sustainability-linked (GSS+) bonds and sukuk facilities, lifting outstanding issuances to RM20.9 billion as at end-December 2025.

“We expect strong participation from the RE segment for debt financing as utility-scale projects expand and investment momentum builds.  Given its depth and established yield curves, the Malaysian bond market is particularly well-suited to fund these long-tenured infrastructure and other capital-intensive assets in the power sector”, Chong adds.

RAM’s rated power portfolio, covering a broad spectrum of utilities and project-financed entities, has remained largely stable to date. As at early-May 2026, 87% of the outstanding portfolio carried ratings of AA₃ or higher, indicating strong debt-servicing capacity.

The full report is available to subscribers at www.ram.com.my and for purchase (click here)

 

Analytical contacts
Liew Kar Ling
(603) 2708 8216
karling@ram.com.my

Chong Van Nee, CFA
(603) 2708 8210
vannee@ram.com.my

Cynthia Lim Sin Lu
(603) 2708 8293
cynthia@ram.com.my

Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my

 

The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.

RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.

Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.

Published by RAM Rating Services Berhad
© Copyright 2026 by RAM Rating Services Berhad