KUALA LUMPUR, RHB Investment Bank Bhd has maintained its overweight rating on the power sector following the introduction of the Corporate Renewable Energy Supply Scheme (CRESS), with guidelines to be launched in September.

In a note today, the investment bank said that under the Green Madani initiative, CRESS aligns with the government’s aspiration to increase renewable energy capacity from 26 per cent (10.6 gigawatts) to 40 per cent by 2035 and 70 per cent by 2050.

The introduction of CRESS represents a progressive step towards power industry reform, leading to a more liberal and competitive market.

“This change also presents an opportunity for existing independent power producers to sell their power output to new clients after their power purchase agreements expire.

“We believe this could attract more players to become green energy power producers, with the ability to negotiate direct pricing for green electricity,” it added.

The bank said this initiative provides companies with flexibility in choosi
ng their energy sources, helping them meet environmental, social, and governance sustainability targets.

Additionally, it offers the ability to hedge against future fluctuations in green electricity rates.

“We view this as a highly positive development, as it will significantly increase the adoption of green energy.

“We expect this initiative to benefit solar engineering, procurement, construction, and commissioning players by boosting their commercialisation and innovation orders,” it added.

Source: BERNAMA News Agency