MALAYSIA’ S latest budget signalled that nuclear power is moving from a distant concept to a more concrete element of the nation’ s long-term energy strategy. CGS International analysts noted that the RM28.6 million allocated to the Nuclear Energy Development Programme under MyPower— an agency within the Ministry of Energy Transition and Water Transformation— represented an early but meaningful step in strengthening the country’ s institutional and technical readiness.
The funding aligns with International Atomic Energy Agency standards, laying groundwork for potential future adoption of nuclear energy as a low-carbon, reliable baseload source.
This development comes as the government accelerates its broader decarbonisation agenda. The longanticipated carbon tax is expected to be introduced next year, beginning
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with the steel, iron and energy sectors.
Although the tax rate has yet to be confirmed, CGS highlighted that, based on international experience— particularly Singapore— utilities are likely to pass the cost on to consumers, resulting in higher electricity bills.
Budget 2026 also reinforced Malaysia’ s commitment to renewable energy. The confirmation of the sixth large-scale solar( LSS6) programme and expanded feed-in tariff quotas ensured continuity for project developers and investors.
Complementary initiatives such as the Solar Accelerated Transition Action Programme and the Corporate Renewable Energy Supply Scheme continue to broaden access to renewable energy for businesses and households alike.
Malaysia also reaffirmed its support for regional energy integration under the Asean Power Grid, with Tenaga Nasional and Petronas working to fast-track the Vietnam- Malaysia-Singapore interconnection to boost cross-border trade in renewable
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energy.
CGS emphasised that the mobilisation of RM16.5 billion from government-linked companies, together with continued support from the National Energy Transition Facility and the extension of the Green Technology Financing Scheme, demonstrated strong public-private alignment with National Energy Transition Roadmap goals.
Beyond energy, Budget 2026 posi-
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tioned Malaysia to become a regional digital hub, allocating RM5.9 billion to research and development and RM2 billion to a sovereign AI cloud.
These measures, supported by major tech investments, enhance the country’ s attractiveness to hyperscalers.
Overall, CGS said the budget’ s continuity and breadth strengthened confidence in Malaysia’ s ability to reach its net-zero 2050 target.
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