Bank Negara’s Energy-Transition Review Tests How Banks Price Risk

Kuala Lumpur, Malaysia, 29 September 2026 – Bank Negara Malaysia is examining whether financial institutions can take more risk, within acceptable limits, to finance the energy transition. Governor Abdul Rasheed Ghaffour said the central bank is reviewing how regulations could be better calibrated to support that shift. The statement signals a policy discussion, not an announced relaxation of capital rules or a guaranteed new funding pool. For banks and project sponsors, the key issue is how to finance unfamiliar technologies without weakening credit discipline.

Energy projects often carry a different risk profile from conventional corporate lending. Construction can be capital-intensive, revenues may depend on long-term offtake contracts, and technologies or grid connections may be less proven. Some projects also have long payback periods and policy-dependent cash flows. A bank asked to support the transition must therefore understand several risks at once: the borrower’s balance sheet, the project’s physical performance, the reliability of its customer and the durability of the regulatory framework.