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FRIDAY | APR 10, 2026

Water tariff reform, energy grid expansion needed o We cannot expect sustainability from system that cannot sustain itself, says Fadillah

Ű BY JOHN GILBERT sunbiz@thesundaily.com

KUALA LUMPUR: Water remains the most under-addressed challenge, and Malaysia is losing over 30% of treated water, with some states losing more than 40%. Deputy Prime Minister and Minister of Energy Transition and Water Transformation Datuk Amar Fadillah Yusof said despite that, domestic water tariffs remain disconnected from operational realities. “We cannot expect sustainability from a system that cannot sustain itself. Technology offers solutions - smart metering, AI detection, optimisation systems. But technology alone is not enough. What we need is courage, to make difficult decisions, to speak honestly about tariffs, and to reform with urgency,” he said at the Malaysia Energy, Water & Climate Change Summit 2026 yesterday. On power, Fadillah said electricity demand is rising and is driven by digitalisation, data centres, and industrial growth. “Yet our grid was not designed for this pace. At the same time, we face a delicate balance – transitioning away from fossil fuels while safeguarding energy security,” he said. Fadillah pointed out that the recent geopolitical tensions in the Middle East have made this reality immediate. He said the volatility of global energy markets remind that energy security is not theoretical – it is deeply structural. “Short-term gains from high oil prices must not distract us from long-term vulnerabilities. Because true security is not about what we earn today, but what we can sustain tomorrow,” he said.

“To our partners – multilateral institutions, development banks – we welcome you. But we must now move beyond pilots. We need scale,” he said. The conference brings together over 150 high-level delegates from government, industry, finance, and academia to address the urgent execution challenges in achieving Malaysia’s net-zero ambitions. Organised by the KSI Strategic Institute for Asia Pacific, the summit focused on the theme “Implementing Infrastructure, Renewable Energy, and Water Reform for a Net Zero Malaysia”. The summit provided a delivery-focused platform, emphasising infrastructure readiness, financing constraints and regulatory reforms required between 2026 and 2027. Discussions centred on bridging the gap between policy ambition and implementation, particularly in the face of rising electricity demand, the water system inefficiencies, and climate pressures.

“We must enable private capital to flow – not hesitate,” he said. On hydrogen, Fadillah said Malaysia remain pragmatic, with potential that must not overshadow priorities. “And on Asean integration – we believe in it. But belief must be anchored in bankability. Because in the end, capital does not move on optimism – it moves on certainty,” he said. Moving on, Fadillah said Malaysia cannot finance this transition alone, adding that public funds must catalyse the transition. “Investors are ready. But they seek clarity. Stable regulations. Transparent frameworks. Bankable agreements. These are not luxuries. They are prerequisites. “We must also confront our own inefficiencies – delays in approvals, fragmented coordination. “Speed is no longer an advantage. It is a necessity. Our green sukuk leadership, our Bursa Carbon Exchange – these are strong foundations. But foundations alone do not build structures.

Fadillah said across Asean, similar pressures are unfolding. And history has shown that during a crisis, the instinct is often to retreat – to delay transition, to extend fossil reliance. “The energy transition is not a climate obligation. It is a strategic necessity. Every megawatt of renewable energy we generate locally is a step away from vulnerability, and a step toward sovereignty,” he said. Fadillah pointed out that Malaysia’s National Energy Transition Roadmap is clear. “But clarity must now translate into action. First – the grid. Renewable energy is no longer the constraint. Transmission is. Without grid expansion, our ambitions will remain stranded. “Second – tariff reform. Subsidies may soften the present, but they burden the future. A sustainable system must reflect real costs – so that investment can follow. “Third – corporate participation. Our frameworks are in place. Now they must perform.

World Bank raises Malaysia’s 2026 growth forecast to 4.4% KUALA LUMPUR: The World Bank Group has raised Malaysia’s economic growth forecast for 2026 to 4.4% from 4.1%, citing resilient domestic demand, its lead economist for Malaysia, Apurva Sanghi, said. fluctuating, increasing by nearly 40% between February and March. Prices of nitrogen-based fertilisers nearly doubled between February and March. Prices of LNG shipments to Asia have increased by almost two thirds.

He said growth would be driven mainly by private consumption, underpinned by favourable labour market conditions, wage gains and government income support measures. “We expect domestic demand to be strong this year because of favourable labour market dynamics, with real median wages rising by six per cent last year, as well as continued government support where required. “So private consumption is definitely a key contributor to growth,” he told reporters at a briefing on Part 1 of the World Bank’s April 2026 Malaysia Economic Monitor (MEM), titled ‘Raising the Ceiling, Raising the Floor, Advancing Malaysia’s Jobs and Productivity Agenda’, yesterday. Last year, Malaysia’s economy grew by 5.2% on account of strong domestic demand and favourable exports. Apurva said the projection for this year is above the regional growth of 4.2%, with the outlook also influenced by three external factors, namely the West Asia conflict, US tariffs and China’s re-direction. On the West Asia conflict, he said the ongoing crisis is expected to heighten global economic uncertainty, with its impact remaining difficult to predict given the rapidly evolving situation. “Crude oil prices have been

“Even if the conflict were to end tomorrow, it would still take time for energy, food and supply chains to resume or pick up. So the downside risks to a forecast of 4.4% in 2026 are immense, and this is an evolving situation, so let’s wait and see how it plays out,” he said. Apurva said Malaysia does not need stimulus amid the West Asia crisis. He said providing a stimulus now would only add to the inflationary impulse, noting that inflation in Malaysia remains stable and contained at present. “As of now, there should be no stimulus. Providing a stimulus now would only add to the inflationary impulse. “Stimulus is (only needed) if inflationary fears snowball into growth concerns like we saw happen during the Covid-19 crisis.” Apurva said Malaysia’s inflation remains stable and well contained, registering 1.6% in January 2026. On US tariffs, he said that currently about 46% of Malaysia’s exports are exempt from tariffs, largely due to its strong electrical and electronic (E&E) as well as machinery segments, but these exemptions could be withdrawn at short notice. Hence, Apurva said this poses a significant risk to Malaysia, given its high reliance on the E&E sector,

Apurva speaks during the briefing at Sasana Kijang yesterday. – BERNAMAPIC

the country’s export re-direction to third markets is emerging as another factor shaping the regional economic landscape, driven by weak domestic demand and expanding industrial capacity that has led to a growing manufacturing surplus. “One survey indicated that 75% of Chinese exporters intend to offset declining exports to the US by expanding into third markets such as

which accounts for nearly 30% of the country’s domestic value-added – the highest in Asean – leaving it more exposed than its regional peers to shifts in US trade policy. “So the bottom line is that Malaysia cannot rely on tariff differentials alone for increasing competitiveness. It needs to foster more innovation,” he said. On China’s re-direction, he said

Malaysia,” he said, adding that Malaysia recorded the fourth-largest increase in exports from China among Asean countries. However, in comparison with regional peers, Malaysia’s exposure appears more moderate, with countries such as Vietnam, Thailand and Indonesia facing a larger impact from China’s export diversion. – Bernama