Foreign participation in electricity generation and transmission activity is subject to the prevailing government policy on foreign equity holdings. Evidence suggests that foreign ownership of less than or equal to 49% was common until recently (see below). According to the government Guidelines on Lincensing under the Electricity Supply Act of 1990, no foreign equity restriction is applied in relation to distribution activity, cogeneration activity and licence for private installation.
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"Malaysia’s fourth competitive bidding programme (dubbed the LSS@MEnTARI and generally referred to by the industry as “LSS4”) for the development of large-scale solar (“LSS”) power plants was launched at the end of May 2020, with bid closing scheduled for 5.00pm, 2 September 2020. The programme deviated from the past three rounds in that this was the first time that participation was limited only to Malaysians. The previous three LSS rounds allowed foreign parties to hold up to 49% of the equity interest whereas the criteria for this round came as a surprise to many, as participation was open only to locally-incorporated companies 100% owned by Malaysians and companies listed on the local stock exchange (Bursa Malaysia) which have at least 75% of their shares held by Malaysians.[...]" (Christopher & Lee Ong, Client Update: Malaysia, 2021 March). For the purposes of the OECD FDIRRI, it is assumed that the more restrictive policy stance applies only to a segment of the power generation marekt
"Appendix 12 - Frequently Asked Questions
Criteria of Licence Application [...]
4. Is there any restriction on foreign equity holdings for each type of licence?
- There is no restriction for distribution activity, cogeneration activity and licence for private installation.
- For licence of generation and transmission activity, the restriction on foreign equity holdings is subject to the prevailing government policy. [...]" (Energy Commission, Guidelines on Licensing Under Section 9 of the Electricity Supply Act No. 447 of 1990, Guidelines/ST/No5/2016)
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"Announcement: Coal fired power plant open bidding
The Energy Commission (EC) is calling for Request For Qualification (RFQ) responses for the development of a 1000 MW (Fast Track Project 3A) supercritical/ultra-supercritical coal fired power plant to be commissioned in Oct 2017, and another 2 x 1000MW (Project 3B) coal plant at a new site that is scheduled to be in operation in stages in Oct 2018 and April 2019. Foreign developers with relevant experience are encouraged to form relationships with Malaysian partners as early as possible. Maximum allowable foreign equity is 49% and suitable foreign developer will be allowed to lead a consortium. The pre-qualification exercise is to screen the prospective bidder/consortium, proposed site and power evacuation line. [...]" (Energy Commission, Call for RFQ, 18 December 2012)
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"Appendix B - LSS Program Process Flow Chart
Government Policy [...] Implementation Mechanism [...] Foreign ownership is less than or equal to 49% [...]" (GUIDELINES ON LARGE SCALE SOLAR PHOTOVOLTAIC PLANT FOR CONNECTION TO ELECTRICITY NETWORKS GP/ST/ No. 1/2016, Appendix B, pp. 20)
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"Part I -Preliminary
[...] Interpretation
2. In these Rules, unless the context otherwise requires - "foreign person" means -- [...] (c) a foreign company as defined in the Companies Act 1965 [Act 125] or any other foreign entity; (d) a Malaysian entity in which the individual, foreign company or other foreign entity specified in paragraph (a), (b) or (c), as the case may be, holds more than forty-nine per centum of the voting power or issued share capital (excluding preference shares);
[...]
Part II - Application for Feed-in Approval
Eligibility criteria to apply for a feed in approval
3. An eligible producer shall be as follows: (a) a Malaysian citizen of not less than twenty-one years of age; [...] (c) a company incorporated in Malaysia other than -- (i) a company in which a foreign person holds, directly or indirectly, more than forty-nine per centum of the voting power or issued share capital (excluding preference shares); [...]" (Renewable Energy (Feed-in-Approval and Feed-in Tariff Rate) Rules 2011)
Energy Commission, Guidelines on Licensing Under Section 9 of the Electricity Supply Act No. 447 of 1990, Guidelines/ST/No5/2016
Energy Commission, Call for RFQ, 18 December 2012.
GUIDELINES ON LARGE SCALE SOLAR PHOTOVOLTAIC PLANT FOR CONNECTION TO ELECTRICITY NETWORKS GP/ST/ No. 1/2016, Appendix B.
Renewable Energy (Feed-in-Approval and Feed-in Tariff Rate) Rules 2011.
[<a href="https://www.st.gov.my/ms/contents/publications/guidelines_electricity/2016/Guideline_Licensee_Nov2016.pdf">Guidelines</a>],[<a href="https://www.st.gov.my/en/web/general/details/238">RFQ</a>],[<a href="http://www.st.gov.my/contents/publications/guidelines_electricity/2017/Guidelines%20on%20Large%20Scale%20Solar%20Photovoltaic%20Plant%20for%20Connection%20to%20Electricity%20Networks_Feb2017.pdf">Guidelines</a>],[<a href="https://policy.asiapacificenergy.org/sites/default/files/RE%20%28Feed-in%20Approval%20and%20Feed-in%20Tariff%20Rate%29%20Rules%202011.pdf">Rules</a>],[<a href="https://www.christopherleeong.com/media/4341/2021_3_clo_lss4_results_analysis.pdf">Other</a>]