KUALA LUMPUR (May 29): RAM Rating Services Bhd (RAM Ratings) has maintained a positive outlook on Malaysia’s power sector, as the country’s energy transition gains momentum.
It said the country’s net zero ambition is supported by strong regulatory backing under key national frameworks, including the National Energy Transition Roadmap (NETR) and state-level roadmaps.
RAM Ratings senior vice-president of infrastructure and utilities ratings Chong Van Nee said that as of end-December 2025, renewable energy (RE) constituted 12 gigawatt (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,” she said in a special commentary, “Power Insight: Advancing Sustainable Energy Transition”, released Friday.
Chong said 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.
She noted that 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 20GW of new power plant capacity is scheduled for commissioning nationwide by 2030,” she said.
In addition, Chong said Malaysia’s debt capital market is well-positioned to finance the sector’s RE capacity expansion and grid upgrades.
She highlighted that the power sector raised RM9.2 billion in green, social, sustainability and sustainability-linked (GSS+) bonds and sukuk facilities in 2025, 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,” she added.
RAM Ratings said its 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,” it added.
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