CASE STUDY 9 Bank Negara Malaysia: institutionalizing climate finance innovation in Malaysia Context: Bank Negara Malaysia (BNM), Malaysia’s central bank, plays a pivotal role in embedding climate considerations into financial systems. It has steadily advanced Malaysia’s climate finance journey by launching the Climate Change and Principle-based Taxonomy (CCPT) and Value- based Intermediation Financing and Investment Assessment Framework (VBIAF). Through the Joint Committee on Climate Change (JC3), BNM and the Securities Commission Malaysia (SC) are collaborating with ministries and industry to pilot initiatives like Greening Value Chains and Greening Industrial Parks to scale innovative funding solutions. Objective: To address the funding gap in Malaysia’s low-carbon transition, BNM and the Securities Commission Malaysia (SC), under the Joint Committee on Climate Change (JC3), launched the Climate Finance Innovation Lab (CFIL) in 2025. CFIL is a collaborative platform mobilizing public and private finance. It connects innovators, financiers, government and experts to unlock innovative funding solutions. Intervention: The CFIL demonstrates how innovative ecosystems can enable strategic financing for the low- carbon transition. –Framework: Administered by Bank Pembangunan Malaysia Berhad (BPMB) with support from the United Nations Development Programme (UNDP), CFIL adopts a modular approach to streamline the ideation and design of financial solutions. CFIL helps early ideas become investment- and funding-ready. –Thematic priorities: CFIL prioritizes energy transition and green innovation, sustainable agriculture, circular economy, sustainable cities and nature-based solutions deliberately to support low-carbon initiatives, including efforts to help industrial parks decarbonize. –Funding mechanisms: Solutions can be either conventional or Islamic in nature, including but not limited to transition loans, green sukuk and sustainability-linked sukuk. BNM’s broader innovation push includes the 2025 Digital Asset Innovation Hub pilots such as tokenized green bonds and programmable payments that link fintech with sustainable finance. As of end-October 2025, a total of 24 projects with a total funding size amounting to $800 million were submitted through CFIL. One project has already secured funding, while other projects have undergone the accelerator programme to enhance their overall readiness. Malaysia’s energy transition represents a generational opportunity to upgrade and secure our industrial base, build a new growth sector, and attract high-value investments. Through the Climate Finance Innovation Lab, we are building a collaborative ecosystem that brings together private, public and philanthropic partnership to design, mobilize and scale innovative funding for low-carbon and climate-resilient industrial development. This effort is central to strengthening Malaysia’s long-term economic resilience and competitiveness while ensuring a sustainable and inclusive future. Madelena Mohamed, Assistant Governor, Strategy and Sustainability, Bank Negara Malaysia Sourcing Identify projects from government, financial institutions, open submissions Implementation Mobilize capital based on the funding model and monitor/ report impactDevelopment Conduct project labs for each eligible project to ideate funding structure and solutions and provide technical assistanceFinancial call Conduct an open call for funders to express interests in the eligible projectsScreening Assess based on eligibility criteria, ensuring alignment with CFIL objectivesBNM: five-stage process of CFIL Industrial Transformation in ASEAN: A Cluster-Driven Model for Regional and Global Collaboration 25

Industrial Transformation in ASEAN A Cluster-Driven Model for Regional and Global Collaboration 2026