Strategic location, abundant natural resources fuel Sabah's renewable energy development

The Sun

27-04-2025

KOTA KINABALU: The growth of renewable energy in Sabah is not just an aspiration but a step forward towards reality, Qhazanah Sabah Bhd group CEO Datuk Ahmad Rizal Dahli said.
He said Sabah is strategically located near several rapidly growing regional economies, giving the state the potential to tap into new market opportunities and benefit from spillover effects – especially with its close proximity to emerging economic hubs like Indonesia' Nusantara.
'With Sabah's abundance of natural resources – especially its high solar radiation levels – it holds enormous potential for renewable energy development.
'In fact, the state could generate up to 99.4GW from solar PV alone, making it a promising player in shaping sustainable energy solutions for the future,' he told delegates at the Sabah Renewable Energy Conference 2025 held last week.
Ahmad Rizal said the synergy between public and private sectors, regulators and investors, and innovators and implementers is essential.
'Looking ahead, it is essential to foster collaboration that leverages the strengths of all stakeholder groups – from financial institutions and technology providers to regulators and asset developers.
'To achieve this, we recognise that green financing, sustainable investment models, and ESG-aligned capital flows are no longer optional – they are key drivers of future growth,' he said.
Ahmad Rizal said renewable energy goes beyond just power generation and infrastructure – it's about uplifting communities, creating quality jobs, and building resilience across Sabah, especially among rural and indigenous populations.
'To us, partnerships reflect the significant collaboration between the public and private sectors to achieve a collective goal to drive the change within Sabah's renewable energy industry.
'Let today be the start of stronger collaboration and bold, forward-thinking ideas. Together, we must commit to building a Sabah that stands out in Malaysia's clean energy future.
'This is no longer a choice – it's a necessity. Each of us has a role to play in protecting our environment while still creating economic opportunities,' Ahmad Rizal said.
Malaysian Rating Corporation Bhd (MARC) group CEO Arshad Mohamed Ismail said Sabah has long been a key contributor to Malaysia's economy.
However, the state's energy sector faces significant challenges that threaten its long-term sustainability.
He said electricity supply remains constrained, as reflected in Sabah's lower reserve margin compared to that of Peninsular Malaysia, underscoring the urgent need to expand generation capacity.
'The situation is further compounded by the state's heavy reliance on fossil fuels, with 86% of power generation currently dependent on natural gas – a resource that is finite in the long term.
'Despite having an estimated 101GW of renewable energy potential, particularly in hydro, solar, and biomass, only 7.3% of Sabah's current energy mix is derived from renewable sources.
'This highlights the need for the state to move towards cleaner, more sustainable energy solutions,' he said.
Arshad said the launch of the Sabah Energy Roadmap and Master Plan 2040 sets a bold vision for reliable, affordable, accessible, and sustainable energy by 2040.
With targets like 50% renewable capacity by 2035, full rural electrification by 2030, and carbon neutrality by 2050, success will require strong public-private partnerships and significant investment.
'At MARC, we envision ourselves as Sabah's key partner in transforming today's challenges into tomorrow's opportunities. Our primary focus is on enabling a secure and sustainable energy future for Sabah by providing professional financial expertise to support these critical transitions.
'MARC is able to provide rigorous assessments of renewable energy projects. By meticulously rating green and sustainability-linked bonds and sukuk, we reinforce investor confidence and validate Sabah's strong AAA domestic credit profile.
'This robust foundation is essential to unlocking the capital required for large-scale renewable energy projects,' he said.
Arshad said MARC remains committed to supporting Sabah's renewable energy aspirations through its expertise in credit ratings, green financing, and investment facilitation.