Fulfilling Malaysia’s Vision of Net-Zero Carbon Goal by 2050: GLCs and SMEs Collaboration in the Green Economy
In pursuit of Malaysia’s ambitious goal of achieving net-zero carbon goal by 2050, government-linked companies (GLCs) are being encouraged to collaborate with small and medium enterprises (SMEs) in the green economy to unlock new growth opportunities. The capital-intensive and rapidly growing green economy offers immense potential for these two sectors to complement each other, ultimately strengthening Malaysia’s climate resilience and contributing to the prosperity of local households and businesses.
Dato’ (Dr.) Ir. Guntor Tobeng, Managing Director of Gading Kencana Sdn Bhd, highlighted that while there are concerns that GLCs might overshadow SMEs in the green industries, both parties possess unique strengths that can benefit the country.
“I think it is healthy for GLCs to enter and participate in the industry, as we have different strengths. SMEs, like us, are nimble and can make quick decisions on the spot, while GLCs must go through several layers of committees. The GLCs have significant financial resources. The best approach is to work together — SMEs can make the necessary, urgent decisions, while GLCs provide the funds to support the larger vision,” said Dato’ Guntor.
He added that in the photovoltaic (PV) solar industry, SMEs are not directly competing with larger players, but rather pushing themselves to reach their own capacity limits. “Some aim for projects like 100 megawatts (MW), but I focus on what I can manage. I could potentially raise funds to do larger projects, but why take on such a big risk? I’d rather take a manageable risk — I can handle 30MW, while the GLCs, with their financial backing, can take on more.”
The Investment Challenge to Achieve Net-Zero by 2050
Malaysia’s vision for net-zero carbon emissions requires an estimated investment of RM1.2 trillion to RM1.3 trillion over the next 26 years. The transition from a fossil-fuel-based economy to a sustainable green economy is projected to elevate the annual GDP contribution from RM25 billion in 2023 to RM220 billion by 2050, while creating 310,000 jobs in the process.
One of the key drivers of this green economy is the PV solar industry, spearheaded by SMEs over the past two decades. The National Energy Transition Roadmap (NETR) aims to increase the share of renewable energy in Malaysia’s energy mix to 40% by 2035, which positions the solar industry for exponential growth.
Founded by Dato’ (Dr.) Ir. Guntor Tobeng and his wife, Datin Hasnah Awang, in 1998, Gading Kencana has become a leading player in Malaysia’s PV solar industry. The company holds assets valued at RM500 million, with plans to reach RM1 billion in the next three years. Gading Kencana operates four solar farms: one in Melaka and three in Perak, and is involved in all five key aspects of the solar PV industry: solar panel development, engineering, procurement, construction, and commissioning (EPCC), installation, vendor services, and testing.
Supporting Bumiputera Participation in the Solar Industry
Since its inception, Bumiputera participation in the solar industry has been minimal, often due to a lack of structured support. Dato’ Guntor praised the recent efforts of the government, particularly through the introduction of distinct Bumiputera categories in the Large-Scale Solar Programme (LSS), also known as LSS-PETRA, led by the Ministry of Energy Transition and Water Transformation. This initiative has opened up new opportunities for Bumiputera players by establishing specific packages designed to boost Bumiputera involvement.
Among the various packages, Package 1 is exclusively for companies with 100% Bumiputera equity, while Package 2, for slightly larger projects, requires at least 51% Bumiputera equity. Package 3, for even larger projects, requires 51% local Malaysian equity, and Package 4 focuses on floating solar projects with similar criteria.
However, Dato’ Guntor emphasized that support should focus on companies with proven track records. “It’s not just about giving opportunities based on Bumiputera status. It’s essential that the companies given these opportunities can deliver high-quality results.”
Overcoming Talent and Technical Challenges
One of the significant challenges that Gading Kencana has faced is the shortage of local technical expertise. The company had to bring in professionals from Germany and Singapore to train its staff. Despite these hurdles, Gading Kencana has invested heavily in knowledge transfer, which has enabled them to build a robust internal technical team.
Convincing local engineers to embrace the renewable energy sector, particularly solar, was another challenge, as many preferred stable government contracts over the perceived uncertainty of the solar industry. Nevertheless, Gading Kencana persisted, collaborating with top-tier technology providers like Germany’s SMA Solar Technology AG and Robert Bosch GmbH to build the company’s capabilities.
Looking Towards the Future: Growth, Innovation, and Community Engagement
Gading Kencana is focusing on organic growth, with income streams driven by its solar farms and EPCC contracts. With plans to list on Bursa Malaysia within the next few years, the company is making strategic preparations, including aligning its accounting standards with the ACE Market’s requirements and working with investment bankers to explore bond issuance and green sukuk as potential fundraising options.
Beyond its corporate growth, Gading Kencana has also been proactive in community engagement, particularly in supporting the B40 group. One of its flagship projects involved installing solar panels at 12 mosques in Johor, with funding from donors. Additionally, the company’s SuriaKu initiative, launched in partnership with the Northern Corridor Economic Region, assists B40 households by providing them with solar energy solutions.
In line with the government’s efforts to expand renewable energy access, Gading Kencana is also exploring rent-to-own models for solar installations, enabling Malaysians to lower their electricity bills without upfront costs. This program aligns with the government’s National Energy Transition Roadmap (NETR) and broader efforts to make solar energy more affordable.
International Ventures and Future Projects
As Gading Kencana continues to grow, its international ambitions are taking shape. The company is currently involved in a US$1 billion (RM4.31 billion) partnership with Saudi Arabia’s March Global, where they are exploring sustainable international projects. Dato’ Guntor noted that Gading Kencana is learning from its past ventures to avoid potential pitfalls, such as those faced in Vietnam, where energy curtailment policies posed financial challenges.
Looking ahead, the company is keen to expand into regions like the Middle East and North Africa (MENA) while also maintaining a presence in ASEAN. The company’s strategy is to pursue manageable-sized projects that allow for better control and execution, helping to ensure project success and maintain their reputation for delivering high-quality results.
With its passion for renewable energy and commitment to integrity, Gading Kencana is positioning itself for long-term success both locally and internationally, contributing to Malaysia’s transition towards a green economy and net-zero carbon goal by 2050.