Bismillahirahmanirrahim

Dato’ Seri Abdul Rasheed Ghaffour, Governor, Bank Negara Malaysia,
Dato’ Mohammad Faiz Azmi, Executive Chairman, Securities Commission Malaysia,
Distinguished guests, ladies and gentlemen

Assalamualaikum warrahmatullahi wabarakatuh, Salam Malaysia MADANI and good afternoon,

It is my great pleasure to welcome you to the ASEAN Investors Roundtable. I am honoured to acknowledge the presence of distinguished leaders from the financial sector, the investment and philanthropic community, multilateral development banks and project champions to discuss the topic of Unlocking Opportunities to Advance ASEAN Climate Initiatives.

Indeed, this is an important topic. ASEAN countries are increasingly facing the harsh realities of climate change, with devastating consequences on our economies and livelihoods. We are experiencing more frequent and severe natural disasters such as floods, droughts and typhoons, causing billions in economic losses annually. As these climate-related challenges intensify, the ASEAN economy risks losing up to 11% of its GDP by 2100¹ if no effective measures are taken. 
^{1 Southeast Asia and the Economics of Global Climate Stabilization}

While ASEAN is thus far on track to be the fourth-largest bloc by 2030, with 2025 GDP projected to grow by 4.7%², surpassing the global average, we cannot be complacent. The global economic landscape is rapidly evolving, with higher economic and financial market volatility expected. The recent tariff announcement by the US administration will change the trade dynamics and operating environment that can influence the economic growth narrative. This presents ASEAN with both a challenge and an opportunity. It underscores the urgency for ASEAN member states to strengthen resilience, enhance collaboration and progress further along the path of ASEAN economic integration. While we remain committed to international trade, fostering stronger intra-ASEAN collaboration will pave the way for a more self-reliant and resilient ASEAN community.

ASEAN’s success today is built on the policies and investments made over the past decades. But to sustain this growth and to take us further along the future trajectory, the region must make right choices and take bold action today. This requires ASEAN to anticipate what the future in 20 to 30 years ahead looks like. It will therefore be remiss for us to ignore the issues of climate change when planning ahead. While developments on this front continue to evolve, the realities of climate change are irrefutable. Whatever the politics of global climate action, climate change will continue to affect our physical environment, and people all around the region and the world.
^{2 ASEAN Outlook 2025} 

Climate action as an engine of growth 

Ladies and gentlemen, 

Notwithstanding these challenges, the ASEAN region is well positioned to drive the green transition and efforts to build climate resilience, while strengthening economic and energy security. We have seen this in the past with the push towards renewable energy generation. On this front, ASEAN positioned itself as an important player in the global supply chain particularly for solar technology, and we remain so till today. That is why, rather than see climate action as a burden or drag on growth, it is an opportunity to light up new engines of growth. For this, it will be important for domestic backward and forward linkages in supply chains to be enhanced within ASEAN and not forgetting to develop human capital to fully harness the growth potential.

Finance is a key enabler in making the transition happen. Therefore, as the Chair of ASEAN this year, Malaysia is committed to driving transformative priority economic deliverables that address our region’s urgent climate challenges through finance. Our priority areas include catalysing access to finance for a just and orderly transition and building a climate-resilient ASEAN. This involves securing innovative funding mechanisms and solutions to support infrastructure initiatives like the ASEAN Power Grid and the carbon capture and storage projects. The ASEAN Power Grid aims to enhance energy connectivity and stability across member states while reducing our carbon footprints. In directing financial flows towards decarbonisation and green efforts, the region has developed the ASEAN Taxonomy for Sustainable Finance which investors, financiers and funders can refer to when making their decisions. The fourth version of the taxonomy is set to be released by end of this year.

The two mega projects which will be discussed today require substantial investments and are essential to achieving our region’s commitment towards decarbonisation, energy security, as well as continued sustainable economic expansion. The success of these projects will also be important in paving the way for further investments in the region.

ASEAN has already started on our collective decarbonisation journey with the development of the ASEAN Strategy for Carbon Neutrality to accelerate efforts to achieve a carbon-neutral economy and foster a sustainable and resilient economy. The public sector has also played a key role in laying the infrastructure and developing a conducive ecosystem for a just and orderly transition. Notably, the coal phase-out assessment is the first-of-its-kind in the world, incorporating our unique ASEAN circumstances to promote a just and orderly transition for the region. In terms of investments, the region’s private green investments have seen impressive expansion, amounting to USD6.3 billion in 2023, 20% higher than the previous year, with increasing foreign participation^3,4. This illustrates the region’s strong commitment towards building climate resilience. But we must sustain this momentum so as to fully meet the region’s funding needs.

The role of the public and private sector

Ladies and gentlemen, 

The economic and climate imperatives are clear, but achieving meaningful progress requires a supportive regulatory environment shaped by the public sector. Indeed, the public sector plays a critical role in accelerating green investments. For example, Malaysia has outlined the country's roadmap to accelerate our energy transition in the National Energy Transition Roadmap (NETR) and has set aside seed funding amounting to RM2 billion to realise these initiatives. However, governments cannot be the sole driver of climate action. Given the scale of investments needed, it would be challenging for governments to meet all funding needs, as we balance and manage the trade-offs between economic development and climate expenditure. 

In this regard, collaboration between the public and private sector will be key. I believe that PPPP (4Ps) – what we call a public-private and philanthropic partnership model – will be key to accelerating climate action that aligns with both national and regional priorities. Of course, there could be many modalities, such as blended finance, that can be explored. Specifically, Islamic finance offers innovative structures that can be tapped into. 

I believe that by engineering innovative funding mechanisms, we can accelerate our transition towards a low-carbon economy, while strengthening climate resilience, in a just, inclusive and orderly way. I trust that if we put our minds to it, together, we can unlock the great potential and opportunities climate action presents and leave behind a legacy of enduring economic prosperity for generations to come.

Thank you and I look forward to a robust discussion ahead.

--BERNAMA