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Malaysia's State-Backed Green-Tech Sector Attracts Global Attention

With generous government eco-supportive stipends already in place – and the promise of more to come – Kuala Lumpur's Greentech event played host to a resurgent number of local players and a wide cross-section of global green businesses.

Photo: Manufacturing-related pollution: Malaysia plans strict curbs over the course of the next eight years. (Shutterstock.com)
Manufacturing-related pollution: Malaysia plans strict curbs over the course of the next eight years.
Photo: Manufacturing-related pollution: Malaysia plans strict curbs over the course of the next eight years. (Shutterstock.com)
Manufacturing-related pollution: Malaysia plans strict curbs over the course of the next eight years.

The warning by the UN's Intergovernmental Panel on Climate Change that the world has only 12 years to avert a climate catastrophe could hardly have been timed better to buoy exhibitors at the recent International Greentech & Eco Products Exhibition & Conference Malaysia (IGEM). Partly as a result, the overall view among exhibitors and attendees was that the sector is now poised for exponential growth, not only in Malaysia, but also across the wider Asia-Pacific region.

Locally, at least, this bullishness would appear to be well-founded, with the industry enjoying the backing of the Malaysian government, which has set targets for the renewable energy mix in the country to increase from its current level of 2% to 20% within eight years.

Commenting on the importance of meeting such a goal, Camilla Fenning, Southeast Asia Head of the British Commission's Climate Change and Energy Attaché Network, said: "Energy demand in Southeast Asia is expected to grow by 80% by 2030. If the region is to meet its Paris Climate Accord commitments, that increase cannot be down to coal-powered generation."

Supported by a network of 60 diplomats based around the world, mainly in high carbon-consuming countries, Fenning sees the UK-backed Climate and Energy Network as having much to bring to the development of renewables in the region. Expanding upon this, she said: "First, this is an area where we have a very successful track record. While the UK used to be a major coal consumer, by 2025 it will have closed all its coal-fuelled power stations, with 40% of the country's energy generation now coming from non-coal sources.

"Furthermore, UK-based banks and insurance companies are increasingly pulling out from investing in coal – not just for ethical considerations, but also because it doesn't stack up financially over the long-term. The argument that coal is cheaper than renewables no longer holds true. The UK also accounts for 40% of the world's offshore wind generation, while London has long been seen as the global centre of green finance."

Fenning also has responsibility for the British government's £1.2 billion Cross-Government Prosperity Fund for Southeast Asia. The key focus of this is the development of renewable energy as a means of reducing poverty and driving sustainable economic development.

Looking more to the local scene, Johor Bahru-headquartered Ditrolic Solar bills itself as one of Malaysia's leading solar Engineering, Procurement and Construction (EPC) businesses. Introducing the company, Business Development Manager Tong Yan Lam said: "Although we launched in 2009, things only really began to take off in 2012 when the government introduced a subsidy programme aimed primarily at domestic solar generation, while also implementing a feed-in tariff scheme.

"In 2016, the government changed its focus and began to support larger, commercial operations. At that point, we became a far more sophisticated business and were the first Malaysian company to set up a solar facility overseas – a 50MW solar plant in Bangladesh. As a result, we are currently very optimistic about the opportunities emerging locally and internationally."

With many energy companies now keen to develop their solar-generating plant holdings, Tong sees scope for Ditrolic to introduce systems that can manage multiple facilities more effectively. Explaining how this could fit into the bigger picture, he said: "Optimism about the government's commitment to the industry is really helping at the moment. For many years, there were a few deep-rooted problems that discouraged business development, but that is now changing. Companies now believe they can compete on the quality of their products rather than through the strengths of their existing relationships and that is proving to be a real spur."

Significantly, it is not just local businesses that are looking to capitalise on the largesse of the Malaysian government, with several overseas companies attending the Greentech event in the hope of staking their own claim to a share of the country's rapidly expanding eco-friendly technology sector. Typical of many of these was Fujian-headquartered Clenergy, a Shanghai Stock Exchange-listed business and one of the key players in mainland China's solar industry.

Outlining the opportunities she sees locally, Marketing Manager Kelly Guo said: "We think there is considerable scope for us in Malaysia's solar sector. Globally, we are a market leader in solar panel mounting technology and we have been a regular exhibitor at this event.

"The latest round of government initiatives has made us ever-more keen to develop our presence here. While we don't yet have a local team in place, we already have extensive operations in Singapore, Japan, Thailand and the Philippines."

Overall, one of the key elements of the government's energy plan is seen as its ongoing commitment to promoting energy efficiency, something that is seen as vital to the future prosperity of the country and the wider region. According to the International Energy Agency, a Paris-headquartered inter-government body reporting to the Organisation for Economic Co-operation and Development (OECD), if all currently available energy-saving technologies and practices were introduced throughout Southeast Asia, the region could reduce its overall energy consumption by as much as 35%.

Representing the view of the local administration, Mohamed Faiz bin Mohd Yusoff, an Executive in Demand Side Management for Malaysia's Suruhanjaya Tenaga (Energy Commission), said: "We are the government regulator for electricity and responsible for Malaysia's energy and we also have a sustainable energy development division, with our current focus very much on promoting energy efficiency and conservation. At present, we are in the final stages of putting together a set of comprehensive rules and guidelines that will help drive sustainable energy and efficiency. There will then be two to three years of public consultation before the guidelines become law.

Photo: Ditrolic Solar: In-situ installation in action.
Ditrolic Solar: In-situ installation in action.
Photo: Ditrolic Solar: In-situ installation in action.
Ditrolic Solar: In-situ installation in action.
Photo: Clenergy: Exporting mainland know-how.
Clenergy: Exporting mainland know-how.
Photo: Clenergy: Exporting mainland know-how.
Clenergy: Exporting mainland know-how.

"Since 2016, we have developed a number of services designed to drive energy efficiency. For example, we undertake energy audits for companies and provide recommendations for improving energy usage. This service is free as long as the company in question acts upon at least some of the recommendations of the audit. Furthermore, we also have funds available to help smaller companies secure bank financing to implement any such changes. Although this particular programme is due to end this year, it may be extended."

The Malaysian government has also set up business parks focused on attracting investment into new green-technology enterprises, with a notable example being Technology Park Malaysia. Assessing the potential impact of this particular initiative, Azra I bin Shu'ib, the park's General Manager, said: "We offer a full incubation programme for start-ups and we also want to attract international collaboration. We have already signed more than 20 MOUs for the park with overseas companies and similar parks outside of Malaysia, including the Bandung Techno Park in Indonesia and the Hong Kong Science Park."

One business that has clearly benefitted from the park's incubator programme is Amantronic, a Selangor-based specialist in the transport engineering sector. Acknowledging this, Fatin Amani Ahmad Sabri, the company's Business Administrator, said: "We manufacture a revolutionary system for rolling stock that provides rail lubrication, resulting in greater energy efficiency, less wear and tear and a reduction in noise pollution.

"To date, business is going well. We have already installed four units and we have 11 train contracts lined up over the next three years. We are very keen to expand overseas, with Vietnam and Indonesia our most likely targets. We wouldn't be where we are today, though, if it had not been for the government-backed incubator programme."

Such success stories aside, it remains clear that the huge growth in demand for green technology will require substantial investment, something that many in the sector are confident will ultimately be forthcoming. Summing up the overall level of optimism and looking to the future, Fenning said: "The amount of investment that will come to this region will be immense. Quite simply, low-carbon energy generation is probably the greatest copper-bottomed investment opportunity the world has ever seen."

Photo: Technology Park Malaysia: Incubating the country’s next generation green businesses.
Technology Park Malaysia: Incubating the country's next generation green businesses.
Photo: Technology Park Malaysia: Incubating the country’s next generation green businesses.
Technology Park Malaysia: Incubating the country's next generation green businesses.

The 2018 Greentech & Eco Products Exhibition & Conference Malaysia (IGEM) took place from 17-20 October at the Kuala Lumpur Convention Centre.

Geoff de Freitas, Special Correspondent, Kuala Lumpur

Content provided by Picture: HKTDC Research
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