Malaysia looks to UAE for help in energy transition efforts

The UAE will help Malaysia establish a renewable energy capacity of 10 GW by 2025, the Malaysian government announced on Friday during Prime Minister Anwar Ibrahim’s state visit to Abu Dhabi.

The Malaysian premier arrived in the UAE on a two-day trip on Thursday and witnessed the signing of a series of investment agreements.

He was accompanied by Malaysian Foreign Minister Zambry Abdul Kadir, and Investment, Trade and Industry Minister Tengku Zafrul Abdul Aziz.

Malaysia’s Ministry of Investment, Trade and Industry said that $8.6 billion in investments were committed to sectors such as aerospace and logistics, and renewable energy.

The agreements include a commitment by Abu Dhabi Future Energy Company PJSC (Masdar) to invest up to $8 billion to develop renewable energy projects with a 10 GW capacity in Malaysia, the ministry said in a statement.

It said the Malaysian Investment Development Authority and the UAE International Investment Council also agreed to strengthen their collaboration to enhance Malaysia-UAE sustainable economic cooperation.

Renewable energy and low-carbon solutions are “at the heart” of Malaysia’s new target investments, the Malaysian investment minister said.

The strategic collaboration will help Malaysia pursue new technology that prioritizes low-carbon, green manufacturing and circular economy solutions, Tengku Zafrul said.

Malaysia has set ambitious targets for its energy transition. Under the Malaysia Renewable Energy Roadmap, the government aims to reach 31 percent (13 GW) of the nation’s energy needs by 2025 and 40 percent (18 GW) by 2035.

In May, the Ministry of Economy committed to increasing renewable energy capacity to 70 percent by 2050.

The target will require a 10-fold increase in its capacity from 2023 to 2050, which the government estimates will require an investment of $143 billion into grid infrastructure, energy storage and network operations.

Malaysian experts see the UAE — a major oil producer which in recent years has become a leader in developing renewable energy and green hydrogen technologies — as a natural partner to help the Southeast Asian nation reach its goal.

“This is the government putting the plan into action,” Adib Zalkapli, director at advisory firm BowerGroupAsia, told Arab News.

“Obviously Malaysia cannot execute the energy transition plan on its own. Partnerships are vital to achieve such ambitious goals.”

Over the past decade, the UAE has taken numerous measures to establish itself as a regional leader on climate action, becoming the top Middle Eastern state in Yale University’s Environmental Performance Index. It has also invested tens of billions in developing clean energy sources, and become the permanent host of the International Renewable Energy Agency headquarters.

“The UAE probably sees Malaysia as a natural partner here. For example, the national oil companies of the UAE and Malaysia are signatories of the UN’s Oil and Gas Methane Partnership 2.0,” said Shahriman Lockman, senior analyst at the Institute of Strategic and International Studies Malaysia.

“This seems consistent with the UAE’s emphasis on positioning itself as a responsible steward of the environment.”