Pengurusan Aset Air Bhd (PAAB) has introduced Malaysia’s first sustainable Islamic finance framework that incorporates blue finance elements, marking a significant milestone in the country’s financial and water sectors. Maybank Investment Bank Bhd (Maybank IB) has been appointed as the sole sustainability structuring adviser for this initiative.
PAAB, a wholly owned company of the Ministry of Finance (Incorporated), plays a central role in supporting the government’s efforts under the Ministry of Energy Transition and Water Transformation (PETRA) to reform Malaysia’s water services industry. The initiative is aimed at improving efficiency, enhancing service quality, and ensuring long-term sustainability across the sector.
In a joint statement, PAAB and Maybank IB highlighted that the framework is the first in Malaysia to integrate blue finance elements within an Islamic finance structure. The framework enables PAAB to issue instruments such as Blue Sukuk and other Shariah-compliant financing solutions, aligned with international standards including the Guidelines for Blue Finance Version 2.0 by the International Finance Corporation (2025) and the Bonds to Finance the Sustainable Blue Economy – A Practitioner’s Guide by the International Capital Market Association (2023).
Through these financial instruments, PAAB aims to strengthen the efficiency, resilience, and sustainability of Malaysia’s water infrastructure, while also contributing to the United Nations Sustainable Development Goals (UN SDGs). The framework reflects a broader commitment to sustainable development and responsible investment practices.
The framework has been independently reviewed by RAM Sustainability, which awarded it a “Platinum” rating under its Second-Party Opinion (SPO) assessment—the highest distinction available. This recognition underscores the strength of PAAB’s sustainability governance and provides strong assurance to investors regarding its capital-raising activities.
PAAB Chief Executive Officer Zulkiflee Omar stated that the framework reinforces PAAB’s role as Malaysia’s national water asset custodian and a key driver of transformation in the water sector. He emphasized that integrating sustainable financing into the organisation’s strategy ensures that every funded project contributes to resilience, efficiency, sustainability, and long-term water security.
Meanwhile, Maybank IB Chief Executive Officer Michael Oh-Lau noted that the collaboration aligns with Maybank’s ROAR30 strategy, which aims to mobilise RM300 billion in sustainable finance by 2030, alongside RM100 billion in new economy financing. He added that the bank has already mobilised RM176.12 billion in sustainable finance between 2021 and 2025.
He further highlighted that, as the blue economy becomes a growing national priority, the partnership with PAAB represents an important step in addressing the need for sustainable capital in water infrastructure, while also supporting efforts to reduce non-revenue water and promote a more sustainable future.