TNB launches Transition Finance Framework, first for an electricity utility in Asean

KUALA LUMPUR: Tenaga Nasional Bhd (TNB) has launched its inaugural Transition Finance Framework, becoming the first electricity utility player in Asean to do so.

In a filing with Bursa Malaysia, the utility giant said the significant milestone highlights TNB’s commitment to energy transition and supports Malaysia’s decarbonisation agenda.

The framework aligns with the country’s goal of achieving net zero emissions by 2050.

“The framework serves to align TNB and its subsidiaries’ financing to its corporate sustainability commitments as outlined within its Sustainability Pathway 2050, Energy Transition Plan and the overarching Reimagining TNB 2025 (RT2025) corporate strategy,” TNB said.

It also noted that the framework sets criteria for existing or new projects that support the energy transition, following relevant market best practices, including the Asean Taxonomy for Sustainable Finance Version 2 and the Asean Transition Finance Guidance.

Under this framework, TNB will be able to issue labelled green, social and/or sustainability debt instruments, including Sustainable and Responsible Investment (SRI) Sukuk, as well as transition-labelled debt instruments to fund projects which will deliver positive societal and environmental impacts.

Maybank Investment Bank Bhd acted as the sustainability framework adviser for the development of the framework, while TNB engaged Sustainalytics to review and provide a second-party opinion on its alignment with relevant guidelines, principles, standards, and the recommendations of the International Capital Market Association’s Climate Transition Finance Handbook 2023.

TNB president/chief executive officer Datuk Ir. Megat Jalaluddin Megat Hassan noted that TNB is the first electricity utility player in Asean to establish a Transition Finance Framework.

“We are proud of the engagement with Maybank in developing TNB’s Transition Finance Framework which will drive forward our energy transition initiatives and accelerate the country’s energy transition programme.

“This Framework serves as a guide for our investments in emission-reduction activities and is a proactive measure in our energy transition journey. Guided by our Reimagining TNB strategy and Energy Transition Plan, this milestone further underscores our commitment to transition towards a more sustainable and resilient energy future in alignment with the objectives of Malaysia’s National Energy Transition Roadmap (NETR),” he said in a separate statement.

Meanwhile, Maybank president & group chief executive officer Datuk Khairussaleh Ramli said: “Maybank is honoured to support TNB in its transition journey and we congratulate TNB for this first of its kind milestone in Asean.”

“With its Transition Finance Framework in place, TNB can unlock the full potential of its investments into low-carbon transition activities whilst setting an example for other carbon-intensive sector players. In line with Maybank’s M25+ strategic thrust of being a regional sustainability leader, we will continue to play an active role in supporting corporations across Asean to decarbonise and transition towards net zero.”