KUCHING: Sarawak’s renewable-energy ambitions will depend on blended finance and strong risk management to draw large-scale investors, said Maybank’s Group Global Banking Head of ESG Strategy and Solutions, Ranita Abdullah.
She said Sarawak’s hydrogen and carbon capture utilisation and storage (CCUS) plans show strong leadership, but the technologies remain costly and complex.
For investors to participate, she noted, projects must be proven bankable.
“When it comes to bankability, green does not trump credit. Just because a project is green does not mean the credit is good. Lenders will always evaluate three key risks, namely pre-completion, post-completion and financial risks,” she told Sarawak Tribune.
Ranita explained that pre-completion risks such as construction delays or cost overruns can threaten a project’s ability to generate revenue.
Banks, she added, prefer fixed-price, lump-sum turnkey contracts, and credible contractors with a proven track record.
“We also look for performance and completion guarantees and adequate insurance coverage,” she said.
She cited the Sarawak Electrolyser Assembly-Distribution Facility (SEA-DF) at the Demak Laut Industrial Park, a collaboration between SEDC Energy Sdn Bhd and PETRONAS’ subsidiary, Lestari H2GaaS Sdn Bhd, as a strong example of coordination and planning.
The project, she noted, aims to build Malaysia’s first large-scale electrolyser with a capacity target of 500 megawatts within five years.
“Hydrogen projects are complex. We also look for project bundling to prevent delays, so that power plants, electrolysers and export facilities can move in sync,” she said.
She said that once construction is completed, banks focus on post-completion risks, particularly revenue certainty and operational performance.
“We want to see long-term offtake agreements with stable cash flow and credible buyers. This ensures the project can repay its loans,” she added.
She cautioned that technology risk remains another challenge, especially for emerging sectors like hydrogen and CCUS.
“New technologies lack long-term operational data, so lenders face uncertainty on reliability and efficiency. For such projects, hurdle rates tend to be higher.” she said.
Financial risks also play a role, including currency mismatches between project income and loan repayments.
“Banks prefer deals where the loan currency matches the revenue currency or is properly hedged,” Ranita explained.
Interest-rate risk, she added, is another factor in long-term financing.
“These risks are why blended finance is crucial. You need development banks and multilateral partners to provide credit enhancement before commercial banks can step in,” she said.
She noted that transition finance in ASEAN remains limited, as varying definitions across countries slow cross-border deals.
Ranita added that frontier technologies will take time to become commercially viable without strong regulatory support.
“Policy consistency and regulatory clarity are essential. They help move projects from concepts to investments,” she elaborated.
Emphasising Maybank’s readiness to support Sarawak’s growth, Ranita said the bank is ready to partner with the State as projects mature.
“We have a strong project-finance advisory team that helps clients address risks before they go to market. Maybank is definitely hungry to do more deals in Sarawak,” she added.
“Blended finance and long-term policy consistency will determine how quickly Sarawak can turn its ambitions into bankable outcomes.”
