M’sia leads the way in Islamic finance

Greenlight: Najib meeting the representatitives from Tadau Energy and Quantum Solar Park. Both firms are involved in developing large scale solar projects. Looking on is Dr Ongkili (right). — Bernama

PUTRAJAYA: Malaysia wants to strengthen its leading position in Islamic finance by raising more green sukuk to fund environmentally-friendly infrastructure developments.

Energy, Green Techonology and Water Minister Datuk Seri Dr Maximus Ongkili said Malaysia’s efforts in socially responsible investments (SRI) has received support from the World Bank, which shares its best practices with government agencies and financial institutions.

“Green sukuk is an innovative method to provide financing for sustainable development and we hope to raise more of such sukuk to support future projects that are friendly to the environment,” he said.

He was speaking at a document exchange ceremony for green sukuk financing involving two large-scale solar projects by Tadau Energy Sdn Bhd and Quantum Solar Park Semenanjung Sdn Bhd.

Dr Ongkili said that by having a financial ecosystem that is condusive, the target to generate renewable energy of 7,200mw by 2020 – of which 2,000mw is derived from the Sun – could be met.

Malaysia made history when RM250mil was raised for Tadau Energy in July, making it the world’s first green SRI sukuk.

Another milestone was when RM1bil was issued for Quantum Solar Park, which is the biggest green sukuk to date.

The exchange of documents was witnessed by Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi while Prime Minister Datuk Seri Najib Tun Razak dropped by earlier for a group photograph with representatives from the two companies and the financial institutions.

Dr Ongkili said Malaysia was able to boost solar energy’s contribution towards power generation due to initiatives under the feed-in tariff mechanism, large-scale solar projects and net energy metering.

These initiatives are expected to help fulfill the country’s commitments to reducing greenhouse gas emission in line with the Paris Agreement, he added.

Tadau Energy managing director Susanna Lim said the company is undertaking a large-scale solar project of 50mw in Kudat, Sabah, of which 2mw is already in operation, with the remaining 48mw expected to go live by year-end.

“We have a few more projects in the pipeline and will make an announcement once things have firmed up,” she said.

Its chairman Tan Sri Chua Ma Yu said the company was fortunate to be the first in the world to issue a green sukuk as a result of the collaboration between the World Bank, Bank Negara and Securities Commission.

“We are committed to contributing to Malaysia’s efforts to reduce its dependence on power generated using fossil fuels,” he said.

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