KUALA LUMPUR: Malaysia will allocate 2 billion ringgit ($430 million ) as a seed fund National Energy Transition Facility to enable catalytic blended finance, Prime Minister Anwar Ibrahim announced on Tuesday.

In his remarks at the second phase of the National Energy Transition Roadmap, Anwar said the facility would enable catalytic blended finance to ensure a seamless flow of financial resources towards energy transition projects that are marginally bankable or yielding below-market returns, reports Xinhua news agency.

Considering Malaysia's current state of immature decarbonization technologies, the country's progress would significantly hinge on alternative energy sources and robust regional and international collaboration, he explained.

"As the paramount challenge in energy transition is financing, it is estimated that an investment of at least 1.2 trillion ringgit between 2023 and 2050 is needed to enable responsible energy transition," Anwar said.

He added that 60 billion-90 billion ringgits are needed to be allocated for crucial projects, including the expansion of public transportation, strengthening grid infrastructure, and reskilling of human capital, in this decade alone.

He also highlighted energy efficiency as one of the energy transition levers that offer effective long-term solutions to manage energy consumption, thus reducing carbon emissions.

The Prime Minister added that the government will launch a major retrofit program to enhance energy efficiency in government buildings.