Infrastructure & PPPs in Malaysia - Q2 2025 Update

YOG INFRA Q2 2025 insight series

MALAYSIA is increasingly sought after by international developers and investors for development of energy and transport infrastructure. We see projects being developed across e-mobility, green hydrogen, LRT/ MRT networks, floating solar, water sector and urban development. We also observe that government is providing pro-active policy and regulatory incentives to attract private sector for such projects, including use of PPPs.

Read the key developments in Infrastructure and PPPs in Malaysia in our latest insight for the country.

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APRIL 2025

CHLOROPLANT TO DEVELOP USD 17 MN GREEN HYDROGEN PLANT IN SARAWAK

Chloroplant Company Limited, a subsidiary of Marcon LC, has secured a USD 17 Mn contract from Singapore-based H1Hydro Group to develop a 10 MW green hydrogen plant in Sarawak. The facility, which will use European electrolysis technology, is scheduled to begin operations in Q1 2026. Discussions are ongoing with Korea- and Malaysia-based firms for hydrogen storage and transportation solutions.

Sarawak is positioning itself as a clean energy hub by leveraging its renewable resources for hydrogen production. The project aims to produce cost-competitive hydrogen for the Asia-Pacific market, supporting global carbon neutrality goals. Future expansion plans include hydrogen container distribution targeting Korea and Japan.

MALAYSIA TO EXPAND PUBLIC TRANSPORT WITH 1,250 NEW BUSES AND DRT VEHICLES

The Government of Malaysia has allocated RM 1.9 Bn (USD 448.90 Mn) to Prasarana to modernise the public transport system. The investment includes 310 new diesel buses to be delivered by June and 250 electric buses arriving by year-end. Additionally, 1,100 more electric buses will be introduced in phases.

To enhance last-mile connectivity, RM 55 Mn (USD 12.99 Mn) has been allocated for 300 Demand-Responsive Transit (DRT) vehicles. The initiative aims to improve urban mobility and support Malaysia’s transition to cleaner transport solutions.

MALAYSIA TO BOOST TRADE WITH CHINA AND THAILAND VIA PERLIS INLAND PORT

The Government of Malaysia has been constructing the RM 492 Mn (USD 116.24 Mn) Perlis Inland Port (PIP) to strengthen trade with China and Thailand, with completion set for Q3 2025. The port will handle 300,000 Twenty-foot Equivalent Unit (TEUs) annually, easing congestion at Padang Besar and enhancing regional rail connectivity, including links to Penang Port and the East Coast Rail Link (ECRL).

The RM 50.27 Bn (USD 11.87 Bn) ECRL project, financed by China’s Exim Bank, will connect Port Klang to Malaysia’s east coast and integrate into China’s Pan-Asian Railway network. The transport minister highlighted PIP’s role in facilitating international trade and increasing Malaysia-Thailand bilateral trade to USD 30 Bn by 2027.

AIRTRUNK, JSW PARTNER FOR MALAYSIA’S LARGEST RECYCLED WATER PROJECT 

AirTrunk and Johor Special Water (JSW) have launched a partnership to develop Malaysia’s largest recycled water supply scheme to support AirTrunk’s data centre campuses, JHB1 and JHB2, in Johor. The project will use treated wastewater to reduce reliance on potable water, conserving local resources and enhancing the sustainability of data centre operations.

The initiative involves major investments in water treatment and delivery infrastructure, complementing AirTrunk’s energy-efficient systems, including a liquid cooling setup introduced at JHB1 in 2024. JSW, a state-owned entity via Permodalan Darul Ta’zim, is leading the collaboration with AirTrunk and local partners. The project is backed by the Johor state government, which sees it as a Public-Private Partnership (PPP) model benefiting both the environment and the local economy.

AirTrunk’s second Johor data centre, JHB2, is currently under development in Iskandar Puteri. The facility will be scalable to over 270 MW, increasing the company’s total investment in Malaysia to RM 9.7 Bn (USD 2.2 Bn). JHB2 is in a major availability zone and will be built with a target power usage effectiveness (PUE) of 1.25. Customers will also have access to multiple renewable energy options. The company’s existing JHB1 also includes onsite solar installations and a virtual power purchase agreement (vPPA) for 30 MW of renewable energy under Malaysia’s Corporate Green Power Programme.

DKSH MALAYSIA EXPANDS GREEN LOGISTICS AND ENERGY INITIATIVES

Diethelm Keller Siber Hegner (DKSH) Malaysia has launched a comprehensive sustainability strategy, integrating green logistics, renewable energy, and waste reduction across its operations. Key efforts include a reverse logistics model in partnership with a local provider, which utilises Electric Vehicles (EVs) and the Light Rail Transit (LRT) system to transport temperature-sensitive healthcare products. The model reduces emissions while maintaining product integrity through partitioned cargo systems.

The company has expanded Electric Vehicles (EVs) deployment into last-mile delivery within its consumer goods division and introduced reusable, temperature-controlled packaging in place of single-use styrofoam. Solar panels have also been installed at key sites like the Shah Alam Distribution Center, supporting DKSH’s move toward renewable energy and energy-efficient operations. These actions reflect the firm’s commitment to reducing its environmental footprint and achieving net-zero emissions.

SAPURA ENERGY WINS RM 40 MN OFFSHORE O&M CONTRACT IN MALAYSIA

Sapura Energy has secured a RM 40 Mn (USD 9 Mn) contract to provide maintenance, construction, and modification services for offshore facilities in Peninsular Malaysia. Awarded to its operations and maintenance subsidiary, Sapura Fabrication, the contract commenced recently and spans six months with an optional six-month extension. The client’s identity remains undisclosed.

The scope includes topside and riser maintenance, facility upgrades, hook-up and commissioning for both greenfield and brownfield sites, as well as living quarters maintenance. Sapura will also handle engineering, project and construction management, and provide all necessary tools and services.

BIDS INVITED FOR MUTIARA LRT

MRT Mutiara Sdn Bhd (MRTM), a subsidiary of Mass Rapid Transit Corporation Sdn Bhd (MRT Corp), a developer of rail projects in Malaysia, has invited bids in three packages for the Mutiara light rail transit (LRT) project in Penang.

The scope of work under the first package includes design, construction, testing, and commissioning of supervisory control and data acquisition (SCADA) and computerised maintenance management system (CMMS). The scope of work under the second package includes design, construction, testing, and commissioning of telecommunication and information technology systems. The scope of work under the third package includes the supply and commissioning of a fare collection system.

The Mutiara LRT project is the first LRT project in Penang. It will span 29.5 km and cover 21 stations (fully elevated). The project will involve an investment of MYR 13 Bn (USD 3.07 Bn). Passenger services are expected to commence in 2031.

EDGEPOINT TOWERS DEPLOYS FIRST SOLAR HYBRID SITE IN MALAYSIA

EdgePoint Towers, a subsidiary of EdgePoint Infrastructure, has launched its first solar hybrid telecom site in Malaysia as part of its renewable energy initiative. The 5.9 kWp site operates autonomously with solar energy and battery storage, aiming to provide up to 100% of the energy needed for telecom operations and significantly reduce diesel dependency.

The deployment will enhance sustainability, cost efficiency, and connectivity, particularly in remote transport corridors. The initiative is expected to cut the site’s annual carbon emissions by around 78%, with further solar and hybrid site rollouts planned across Malaysia by the end of 2025.

Solar energy has proven to be an ideal solution for Malaysia, given its equatorial climate and high levels of solar insolation.  Solar hybrid solutions are an adjacent focus area, it is a key part of broader strategy of implementing innovative, sustainable solutions, driving an industry-wide transformation toward cleaner, more efficient operations and are optimistic about future collaborations with both Mobile Network Operators (MNOs) and non-MNO clients to help them meet their green objectives.

MALAKOFF PARTNERS WITH MARDEC TO EXPAND INDUSTRIAL SOLAR PROJECTS IN MALAYSIA

Malakoff Radiance Sdn Bhd, a subsidiary of Malakoff Corporation, has signed a Solar Power Purchase Agreement (SPPA) with Mardec Bhd to deploy rooftop solar systems at five of Mardec’s key facilities in Peninsular Malaysia. The installation, scheduled to begin in mid-July 2025, will be developed under the Net Energy Metering scheme and will generate a total capacity of 3.54 MWp. The largest share, 1.15 MWp, will be installed at Mardec Processing in Baling, Kedah.

This initiative highlights Malakoff’s strategy to embed renewable energy into commercial and industrial operations, aiming to reduce carbon emissions while improving operational sustainability. Malakoff Radiance had secured 22.1 MWp of projects in 2024, with 17.4 MWp already installed, serving clients like Senai International Airport and UMW Group. Overall, Malakoff’s commercial and industrial solar portfolio now totals 60MW, with its broader renewable energy portfolio—managed under Malakoff Green Solutions—reaching 173 MW.

AIZO SECURES PPA WITH TNB FOR 99.99 MW SOLAR PROJECT IN KAMPAR

AIZO Group Bhd, via its 63%-owned subsidiary, Wawasan Demi Sdn Bhd (WDSB), has formalised its Power Purchase Agreement (PPA) with Tenaga Nasional Berhad (TNB) for the development of a 99.99 MWac large scale solar photovoltaic (LSS) facility in Kampar, Perak. Under the PPA, WDSB will design, construct, own, operate and maintain the solar photovoltaic energy generating facility, with electricity to be supplied to TNB’s grid system.

The PPA represents a major step forward in the realisation of one of AIZO’s largest clean energy undertakings to date. The project will be financed through a combination of internally generated funds and/or bank borrowings, reflecting the company’s confidence in the commercial and strategic value of the project. The 99.99 MWac Kampar solar facility is poised to become a significant contributor to AIZO’s long-term earnings, while further reinforcing its presence in Malaysia’s clean energy space.

MAY 2025

THE GOVT OF MALAYSIA ALLOCATES USD 180 MN TO HERITAGE REVIVAL AND GREEN CORRIDORS

The Government of Malaysia has announced plans to invest USD 180 Mn in the Warisan KL initiative to rejuvenate downtown Kuala Lumpur through heritage restoration and urban greening. Spearheaded by sovereign fund Khazanah Nasional via Think City, the project covers a 20 sq. km area and includes 10 flagship initiatives aimed at preserving historical landmarks and creating walkable green corridors.

Central to the effort are the restoration of Carcosa Seri Negara and the Sultan Abdul Samad Building, two colonial-era landmarks currently closed for refurbishment. Preliminary plans include transforming the sites into mixed-use spaces featuring museums, galleries, shops, and hospitality outlets.

FIRST MOBILE HYDROGEN REFUELLING STATION LAUNCHED IN PUTRAJAYA

The Government of Malaysia has launched its first Mobile Hydrogen Refuelling Station (MHRS) in Putrajaya as part of a RM 15 Mn (USD 3.47 Mn) pilot project to boost hydrogen mobility and support the country’s zero-carbon goals by 2050. Located at Precinct 2, the MHRS can dispense up to 50 kg of hydrogen daily and is backed by the Ministry of Science, Technology and Innovation (Mosti), NanoMalaysia Berhad, and partners including Petronas Technology Ventures, Sime UMW, and UMW Toyota Motor Sdn Bhd (UMWT).

The station will act as a testing ground for hydrogen infrastructure and technologies. Three Toyota Mirai fuel cell electric vehicles (FCEVs) will be used to demonstrate functionality, though Malaysia has yet to register any hydrogen-powered vehicles. Officials aim to establish a fuel ecosystem by 2030. The MHRS is expected to drive R&D, attract investment, and position Malaysia as a regional hydrogen tech hub.

SUNWAY GROUP UNVEILS RM 2 BN SEREMBAN SENTRAL TOD IN MALAYSIA

Sunway Group has launched the RM 2 Bn (USD 463.98 Mn) Seremban Sentral transit-oriented development (TOD), aiming to transform the historic city of Seremban into a dynamic economic and transport hub in Malaysia. Situated on an 8.4-hectare site adjacent to the Seremban Railway Station, the project will begin construction in 2025, with the first phase—including a medical centre and the Seremban Yard—starting within six months following a land agreement with the Railway Assets Corporation (RAC).

The 14-year development will leverage existing rail infrastructure, integrating closely with the Klang Valley Double Track Phase 2 (KVDT2), set for completion in 2028. The plan includes residential units, commercial spaces, education and healthcare facilities, with the iconic Seremban Railway Station to be preserved and incorporated into the project. The initiative is expected to raise property values, generate jobs, support medical tourism, and serve as a new growth engine for the state capital.

GENTARI SIGNS SOLAR PPA WITH TM TO POWER SIX MAJOR FACILITIES WITH 4.3 MW SOLAR SYSTEMS

Clean energy provider Gentari, via its wholly owned subsidiary Gentari Renewables Sdn Bhd, has signed landmark Solar Power Purchase Agreements (PPAs) with Telekom Malaysia Berhad (TM) to supply solar energy to six of TM’s major facilities.

This development follows the recent expansion of a strategic collaboration between TM and PETRONAS, which now includes a new tripartite Memorandum of Understanding (MoU) with Gentari. The partnership aims to accelerate the decarbonisation of TM’s assets and further Malaysia’s green energy agenda.

Under the PPAs, Gentari will be responsible for designing, installing, and operating solar energy systems across TM’s facilities. These systems will deliver an estimated total capacity of 4.3 MWp and generate approximately 4.82 GWh annually. The initiative is expected to reduce greenhouse gas emissions by about 3.66 million tonnes of carbon dioxide equivalent (tCO2e) annually.

The clean energy will power key TM operations, including data centres in Cyberjaya and Iskandar Puteri, the TM R&D Complex in Cyberjaya, TM’s Submarine Cable Landing Station (SKDL) in Mersing, and Multimedia University campuses in Cyberjaya and Melaka. The installations at university campuses also support Malaysia’s wider green campus initiatives.

PETRONAS GAS TO DEVELOP 120 MW POWER PLANT IN LABUAN WITH SABAH GLCS

Petronas Gas Berhad (PGB) has announced that its wholly owned subsidiary PG Energia Sdn Bhd (PGE) will develop a 120 MW power plant in Labuan through a joint venture with Sabah-based partners. The joint venture named Rancha Power Sdn Bhd involves PGE holding a 60% stake, while Sustainable Power Sdn Bhd (SPSB) and SEC Power Sdn Bhd (SECP), subsidiaries of Sabah Electricity Sdn Bhd (SESB) and Sabah Energy Corporation (SEC) respectively, will each hold 20%. The plant is expected to begin commercial operations by January 2028. The project will exceed the current power generation capacity in Labuan, including the Patau- Patau Power Station which has a capacity of 113 MW.

The new power plant supports rising electricity demand in Labuan which has been growing at 5 to 7% annually in line with economic development and population growth. Additionally, the commercial and industrial sectors in Labuan contributes significantly to the overall consumption, at a monthly usage of 10,000 kWh and 20,000 kWh respectively.

FEDERAL FUNDING REQUIRED FOR PAN ISLAND LINK 1 HIGHWAY PROJECT IN PENANG

The State Government of Penang has appealed to the federal government to approve funding for the Pan Island Link 1 (PIL1) highway project under the 13th Malaysian Plan. The project would significantly enhance traffic management on the island. The application is currently under federal review. Other key projects to get federal support include the elevated highway from Juru to Sungai Dua, the Mutiara LRT, the Penang International Airport expansion, and the Sungai Perak-Penang water supply project.

The Government of Penang updated the assembly on the Silicon Island reclamation initiative, which has completed 150 out of a planned 2,300 acres. Additionally, highlighted Penang’s 2023 economic performance, with a GDP of RM 116 Bn (USD 27.54 Bn), driven by services and manufacturing, and noted the state’s record-high GDP per capita. Further, a detailed plans for the state’s RM 1.185 Bn (USD 281.40 Mn) water infrastructure plan to meet future demand, the upcoming Penang Water Resources Board Bill, and the KITAB Smart City Campus development in Bandar Cassia aimed at supporting Islamic education and urban growth was announced.

SAUDI ARABIA'S ACWA POWER SIGNS DEAL TO DEVELOP RENEWABLES CAPACITY IN MALAYSIA

Saudi Arabia's ACWA Power had signed a preliminary agreement to develop up to 12.5 gigawatts of renewable energy generating capacity in Malaysia with an initial investment of up to USD 10 Bn. 

The renewable energy utility agreed to a memorandum of understanding with the Malaysian Investment Development Authority to explore developing the capacity by 2040. Malaysia wants renewable energy to make up 70% of its power mix by 2050.

It also signed strategic partnership agreements with several Malaysian companies for possible energy projects, including for large-scale water desalination. These strategic agreements represent a major milestone in ACWA Power's expansion in Southeast Asia and reflect our commitment to supporting Malaysia and the broader ASEAN region's energy transition.

SAMAIDEN WINS RM 45 MN SOLAR EPCC CONTRACT IN KEDAH

Samaiden Group Bhd has bagged a RM 45 Mn (USD 10.57 Mn) contract to carry out engineering, procurement, construction and commissioning (EPCC) works for a large-scale solar photovoltaic (LSSPV) power plant in Kulim, Kedah.

The contract was awarded to its subsidiary, Samaiden Sdn Bhd, by PAXS Renewables Sdn Bhd, the scope includes the full design, engineering, procurement, construction, testing and commissioning of the 9.99 megawatt alternating current (MWac) facility.

The project, approved by the Energy Commission in December 2024 under the Large-Scale Solar 5 (LSS5) programme, reflects Samaiden's growing presence in Malaysia's utility-scale solar segment. It also reaffirms commitment to supporting the government's renewable energy agenda while creating long-term value through consistent execution and sustainable earnings contributions.

The project will begin immediately from the May 2025, letter of award date, with on-site works to commence following the issuance of a formal notice to proceed, pending fulfilment of all contractual conditions. The plant is expected to achieve commercial operation by July 2027.

JUNE 2025

PLANS UNDERWAY TO DEVELOP MADANI CITY IN PUTRAJAYA

The Government of Malaysia has announced plans to build ‘Madani City,’ a 102-acre high-density, vertical township in Putrajaya designed for over 30,000 residents. The development will feature 10,000 residential units integrated with AI technologies, advanced digital infrastructure, and green mobility systems to promote sustainable living.

The project is a strategic investment aligned with the federal government’s Chase City Vision, aiming to create eco-friendly, safe, and advanced urban spaces in Kuala Lumpur, Putrajaya, and Labuan. The RM 4 Bn (USD 950 Mn) project will be developed by Putrajaya Holdings Sdn Bhd (PjH) through a Public – Private Partnership (PPP) under the build, lease, maintain, and transfer (BLMT) model, without utilising government funds at the initial stage.

Additionally, the city will include facilities such as vertical schools, Technical and Vocational Education and Training (TVET institutions), financial and health services, emergency stations, and a mosque, all conveniently located near residential areas. The first phase, with about 3,000 residential units and a vertical school, is expected to be operational by late 2027.

DAYONE SIGNS MALAYSIA’S FIRST 500 MW RE DEAL 

DayOne Data Centers has signed a landmark corporate renewable energy supply scheme (CRESS) agreement with Malaysia’s Tenaga Nasional Berhad (TNB), securing up to 500 MW of solar energy over 21 years. This is the country’s first bilateral energy supply contract (BESC) under the CRESS framework, enabling direct access to clean energy for medium- and high-voltage corporate users through TNB’s grid.

The renewable power will be generated by new solar facilities developed by TNB Renewables, a TNB subsidiary. The initiative aligns with Malaysia’s push to simplify green energy access and build a sustainable digital economy. DayOne, which operates hyperscale campuses in Nusajaya and Kempas Tech Parks, aims to fully integrate renewables into its operations and reduce Scope 1 and 2 emissions. The partnership supports AI-driven digital infrastructure and complements TNB’s broader goal of enhancing grid resilience and enabling high-performance computing needs.

EVE ENERGY TO INVEST USD 1.2 BN IN ENERGY STORAGE IN MALAYSIA

China-based Eve Energy is set to invest up to RM 8.65 Bn (USD 1.2 Bn) in a major expansion of its energy storage battery production facility in Kulim City, Kedah, Malaysia. The project, led by its local subsidiary Eve Energy Storage Malaysia Sdn Bhd, aims to meet rising global demand and counter risks from ongoing international trade tensions.

Eve Energy’s project, set to occupy 484,000 square meters in Kulim City and complete within 2.5 years, adds to a growing list of Chinese battery investments in Southeast Asia. While much attention has focused on electric vehicle (EV) batteries, this facility will be dedicated to energy storage—a segment projected to grow from 137 GWh in 2024 to over 680 GWh by 2030 globally.

Eve Energy, which ranked sixth in China’s EV battery market in May 2025, with 2.09 GWh in installations, sees the project as key to deepening its Southeast Asia footprint. The company is also developing an EV battery factory in Hungary as part of its broader international expansion.

MALAYSIA'S SECOND WTE PLANT COSTING RM 660 MN TO BE BUILT IN SUNGAI UDANG, MELAKA

The country’s second waste-to-energy (WTE) plant, costing RM 660 Mn (USD 156.06 Mn), will be built in Sungai Udang, Melaka, and is expected to be fully operational by 2029. The Sungai Udang WTE project had undergone an open tender process and would be implemented through a Public-Private Partnership (PPP) model approach between the Ministry of Housing and Local Government (KPKT) and a consortium comprising Malakoff Corporation Bhd and Alam Flora Environmental Solutions Sdn Bhd, based on the build, operate, and own model.

The Sungai Udang WTE plant is expected to process up to 1,000 tonnes of solid waste per day, generate 22 megawatts (MW) of electricity, and reduce over 259,000 tonnes of carbon dioxide emissions annually—equivalent to the environmental benefit of planting more than 4 million trees.

The amount of solid waste generated by Malaysians is projected to increase to 17.03 million metric tons by the year 2035. This initiative is expected to contribute up to 600 MW of renewable energy as part of the strategy to achieve 70% renewable energy capacity by 2050.

SARAWAK PARTNERS WITH CHINA THREE GORGES, SHANGHAI ELECTRIC TO DEVELOP 1 GW FLOATING SOLAR PROJECT AT BAKUN RESERVOIR

The Government of Sarawak has entered a strategic partnership with two major Chinese firms—China Three Gorges International Corporation (CTGI) and Shanghai Electric—to explore the development of a large-scale floating solar power project at the Bakun Reservoir. The agreement, formalized through a memorandum of understanding (MoU), marks a significant step in Sarawak’s renewable energy expansion strategy.

The proposed floating solar project could reach a capacity of up to 1 gigawatt (GW), significantly enhancing the role of solar in Sarawak’s energy mix. Renewable energy currently accounts for around 60% of the state’s electricity generation, with hydropower dominating the mix. Sarawak’s three primary hydroelectric sites—Bakun, Murum, and Batang Ai—are all being positioned for hybrid solar-hydro expansion.

LBS SECURES RM 88.4 MN GREEN FINANCING FOR MAIDEN SOLAR PROJECT IN NEGERI SEMBILAN

Property developer LBS Bina Group Berhad (LBS) has secured RM 88.4 Mn (USD 20.93 Mn) in green financing from Alliance Bank Malaysia Berhad to fund the Engineering, Procurement, Construction, and Commissioning (EPCC) of its first-ever 43 MWp solar farm project in Senawang, Negeri Sembilan.

The financing was obtained through LBS’s special purpose vehicle, Suria Hijauan Sdn Bhd, under the Corporate Green Power Programme (CGPP). The project is slated for completion by end-2025 and is expected to produce approximately 53,000 MWh of clean energy annually—equivalent to offsetting 35,000 tonnes of carbon emissions.

The EPCC contract, valued at RM 104 Mn (USD 24.62 Mn), was awarded to Atlantic Blue Sdn Bhd, a subsidiary of Solarvest Holdings Berhad, recognised for its track record in executing large-scale solar projects.

The green financing signifies the Group’s strategic diversification into renewable energy. Securing this facility from a reputable institution like Alliance Bank underscores market confidence in our renewable energy plans and reinforces our long-term sustainability commitment. The project is expected to generate stable, recurring revenue for LBS, boosting its long-term earnings resilience and marking a significant step forward in the Group’s sustainability journey.

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List of key transactions - Malaysia Q2 2025

Source: YOG INFRA analysis

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