Malaysia’s energy and utilities sector is poised for accelerated growth over the next year, driven by rising electricity demand and an expanding portfolio of renewable energy (RE) projects. Investment activity is expected to increase along the entire value chain, with a particular focus on solar power, energy storage, and grid infrastructure.
Industry analysts highlight that Tenaga Nasional Bhd (TNB), the country’s largest electricity utility, is entering a peak spending phase, which should enhance earnings visibility for the sector. Apex Securities Research maintains an “overweight” stance on the energy and utilities sector, identifying TNB, Sarawak Cable Bhd, Solarvest Holdings Bhd, and Samaiden Group Bhd as top picks for potential investment. Target prices were set at RM16.37 for TNB, RM3.35 for Sarawak Cable, RM5.11 for Solarvest, and RM3.99 for Samaiden.
A significant driver of this growth is the Corporate Renewable Energy Supply Scheme (Cress), which has gained momentum alongside the sixth round of the large-scale solar (LSS6) program. Apex Securities Research anticipates that the first engineering, procurement, construction, and commissioning (EPCC) contracts under Cress’s Acceleration Package will be awarded in the fourth quarter of 2026. This package reduces the system access charge for firm green electricity supply to 14 sen per kilowatt-hour (kWh) from 20 sen for 10-year contracts on projects commissioned by the end of 2028, potentially stimulating around RM17 billion in investments linked to the 3,148 megawatts (MW) of registered capacity.
The research house points out that new gas-fired generation capacity will be insufficient to meet demand in the near term. With only 1.9 gigawatts (GW) of new gas capacity expected before 2029 and 5.7GW of coal power contracts expiring from July 2029, firm solar power emerges as the quickest option to provide reliable energy supply ahead of new gas developments.
Apex Securities Research favors exposure in three main areas: TNB’s regulated capital expenditures, supply chain companies such as Sarawak Cable and Cheeding Holdings Bhd, and solar contractors including Solarvest and Samaiden. TNB’s investment plans are also supported by a robust pipeline of data centre projects, with 8.35GW of data centre capacity secured across 61 projects, 5.65GW of which is already connected. Grid-related spending is expected to peak in the latter half of 2026 and extend through 2027, with TNB’s regulated capital expenditure projected to reach approximately RM15 billion in 2027, incorporating an estimated RM8 billion in contingent spending.
Additionally, about 1.9GW linked to the LSS5 round and 1,975MWac associated with LSS5+ are scheduled to become operational between 2026 and 2028. Alongside Cress projects—which must commence operations by the end of 2028 to benefit from the reduced system access charge—and LSS6 initiatives, roughly 6.5GW of LSS solar capacity and up to 3.1GW of Cress capacity are expected to be under construction from 2026 to 2029.
An industry analyst noted that Malaysia's transition toward renewable energy is generating extensive opportunities for utilities and renewable energy companies alike, with grid modernization, the rollout of solar installations, and energy storage solutions anticipated to be key growth sectors over the coming years.