PAAB Launches Malaysia's First Sustainable Islamic Finance Framework Featuring Blue Finance, Advancing Water Security

KUALA LUMPUR, June 30 (Bernama) -- Pengurusan Aset Air Bhd (PAAB), a wholly owned company of the Minister of Finance (Incorporated), today launched its Sustainable Islamic Finance Framework, marking three national milestones.

The framework is Malaysia’s first to incorporate blue finance, the first to receive a Platinum Rated Framework certification, and the country’s first sustainable Islamic finance framework.

Developed with Maybank Investment Bank Bhd as the sole sustainability structuring adviser and RAM Sustainability Sdn Bhd as the second party opinion provider, PAAB said the framework reinforces its commitment to sustainability, transparency, governance and accountability in its financing activities.

"The Sustainable Islamic Finance Framework establishes a comprehensive platform that enables PAAB to align its financing activities with internationally recognised sustainability principles and Islamic finance values. 

"It also lays the foundation for future sustainable sukuk and blue sukuk issuances to support investments in water-related assets infrastructure and environmentally sustainable projects," it said in a statement. 

PAAB chairman Datuk Seri Jaseni Maidinsa said that as of Dec 31, 2026, the group's total migrated and committed investments in Malaysia's water services industry reached RM46.88 billion. 

He said these investments have delivered tangible outcomes for the nation, including the completion of 21 water treatment plants with a combined capacity of 2.085 billion litres per day and the construction of 42 reservoirs with a total storage capacity of 783 million litres.

In addition, 3,263 kilometres of pipelines have been installed to replace ageing infrastructure, reduce non-revenue water losses and improve supply reliability.

"These achievements demonstrate the federal government's and PAAB's unwavering commitment to modernising Malaysia's water infrastructure and strengthening national water security for future generations," he said in his speech at the launch today.

Meanwhile, Finance Minister II Datuk Seri Amir Hamzah Azizan, who officiated at the launch ceremony, said PAAB is set to issue its inaugural blue sukuk by the third quarter of this year.

He said the blue sukuk it expected to be the first blue finance instrument in the world to adopt a taxonomy jointly developed with Maybank and RAM Sustainability, with guidance from the Securities Commission Malaysia.

"If we look at the use of assets used as collateral for this sukuk, it involves water assets. Through a framework that ensures that sukuk repayments are done properly, it shows a new approach to how assets can be securitised and used as collateral for payments, thus opening up opportunities to increase investments in the country's water assets.

“We are aware that if investment in water assets is insufficient, it will lead to various problems for Malaysia. Therefore, innovations like this are important in opening up more investment opportunities in the sector," he said at a press conference after the launch here today.

-- BERNAMA