At the Energy Asia conference held on Monday, Malaysian Prime Minister Anwar Ibrahim announced that Tenaga Nasional (TENA.KL), the state utility company, has allocated 43 billion ringgit (approximately $10.1 billion) for upgrading the national power grid. This infrastructure development is aimed at supporting the country’s growing needs in artificial intelligence (AI) and battery energy storage systems.

Malaysian Prime Minister Anwar Ibrahim speaks at the IISS Shangri-La Dialogue security summit in Singapore, May 31, 2025.

During his speech, Anwar also highlighted several initiatives by the national energy firm, Petronas (IPO-PETO.KL). The company plans to establish three carbon capture and storage (CCS) facilities in offshore areas of Malaysia. These facilities are designed to support not only the oil and gas sector but also a range of other industries.

Malaysia's CCS strategy includes collaborations with over ten international partners, primarily from Japan and South Korea. Key global energy firms such as TotalEnergies (TTEF.PA) and Shell (SHEL.L) are also involved in the effort. Petronas is further partnering with Eneos, Mitsubishi, and JX Nippon to explore the transport and storage of carbon dioxide from Tokyo Bay to Malaysia.

Anwar stated: “This positions CCS not only as a vital decarbonisation tool but also as a promising new revenue stream for the region.”

In addition, Petronas CEO Tengku Muhammad Taufik Tengku Aziz noted that the company is responding to increasing demand driven by AI and the expansion of data centres. Malaysia is emerging as a significant regional centre for such infrastructure in Southeast Asia.

International technology companies such as Microsoft (MSFT.O), Google (GOOGL.O), Amazon (AMZN.O), Nvidia (NVDA.O), and Oracle (ORCL.N) have all made investments in Malaysia. These are primarily focused on cloud services and the development of data centres, contributing to the country's growing prominence in the AI and digital economy sectors.