The Second Malaysian Stimulus Package – What Does it Hold for the Energy & Power Sector in Malaysia?

SINGAPORE, March 23 /PRNewswire/ — The Malaysian government announced a huge stimulus package on March 10, 2009. The first package announced in November 2008 was generally considered to be too timid and too little. The second package is to be implemented over two years and commits RM 60 billion (US$16.2 billion) to stimulating the economy. What opportunities can the energy & power industry expect from this package?

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According to Frost & Sullivan Asia Pacific Associate Director of Energy & Power Systems Practice Subramanya Bettadapura, there will be a thrust on development of Eastern Malaysian States, especially through the Kota Kinabalu transmission system project.

“The electricity demand in the Sabah and Sarawak region is projected to grow at 7.7 percent per annum up to the year 2010. Various power generation, transmission and distribution projects will have to be implemented in order to support the growing demand in the two Eastern Malaysian states,” he says.

Subramanya adds that the 9th Malaysia plan had identified quite a number of electricity supply infrastructure projects to be implemented in Sabah. Key among them was the 132kV Transmission Line System Environmentally-Friendly Project; the Delivery System Upgrading Projects in Kota Kinabalu, Sandakan and Tawau; the Delivery System Reinforcement Project throughout Sabah and WP Labuan; the Kota Kinabalu Delivery System Reinforcement Project; and the KK Outer Ring 132kV Project.

“Most of these projects are to be completed in 2009. The stimulus package covers the Kota Kinabalu transmission system project. This project will strengthen the grid and existing distribution infrastructure,” he continues.

There are many upcoming opportunities in Sabah and Sarawak for stakeholders in the energy and power industry that are worth considering such as the impetus for Green Technology through energy efficiency projects, conversion of waste to energy, biomass & biogas, and solar.

According to Subramanya, the government will provide loan guarantees up to 80 percent to qualifying companies for implementing environmentally friendly productivity enhancing projects.

“This is the time for getting the innovative green projects from the drawing board to the implementation stage. Energy efficiency projects in industries can obtain funding under this package. Going green makes perfect business sense. Opportunities in this area are plenty and it would be worthwhile for senior managers to evaluate the green technology opportunities available in the respective sectors and for their organizations,” he adds.

The opening up of the Services Sector is another broad opportunity for suppliers and service providers in the energy and power sector. “The government has identified the services sector as an important growth area and is taking necessary steps to further liberalise this sector. The process is in line with Malaysia’s commitment under the ASEAN framework agreement on services and WTO,” says Subramanya.

“Liberalisation gives opportunities to bring in investment to this high growth sector. Liberalisation also eases the entry of newer technology and qualified professionals into the country. This provides opportunities to service providers to the energy and power industry to strengthen their professional team and technology. Consultancy services would stand to benefit immensely from this development,” he adds.

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