KUALA LUMPUR (Dec 13): Malaysia’s bond and sukuk markets are well-established and poised to benefit from an anticipated growth in green investments, said RAM Rating Services Bhd. 

In a statement today, RAM said the country may gain traction as a green finance hub with the increased demand for green finance, especially since infrastructure represents a significant portion of the Malaysian market. 

This is because demand for additional Asean green investments is envisaged to come up to an estimated US$3 trillion for the period between 2016 and 2030, with 60% earmarked for infrastructure, according to a report published by DBS Bank and the United Nations Environment Programme Inquiry. 

This means Asean’s green investment market could be 37 times the size of the global green bond market in 2016, RAM said. 

“Green finance and Islamic finance are rapidly and successfully converging in Malaysia,” said Promod Dass, the rating agency’s deputy chief executive officer. 

Promod lauded the regulators for catalysing Malaysia’s success in sustainable finance.  

He noted the Securities Commission of Malaysia’s release of the Sustainable and Responsible Investment (SRI) Sukuk Framework in 2014 and the ASEAN Green Bond Standards in November 2017 as important drivers. 

This brought forward the issuance of RAM-rated green SRI sukuk, as seen in Khazanah Nasional Bhd, Tadau Energy Sdn Bhd and Permodalan Nasional Bhd, the credit rating agency said. 

RAM is one of the six pioneer credit rating agency signatories to the UN-supported Principles for Responsible Investment’s Statement on ESG in Credit Ratings. Its sister company RAM Consultancy Services Bhd is also involved in the green finance market, as the pioneer Asean-based provider of sustainability ratings and second opinions on green bonds and sukuk.