FY2025
Overview
The Business Review outlines how Malakoff translated strategy into operational delivery in FY2025 across its Energy and Environmental Solutions segments. During a year shaped by evolving transition dynamics, the Group navigated operating realities with a firm focus on reliability, cost discipline and delivery capacity. These conditions underscored the importance of managing assets with greater precision, maintaining robust cost and risk controls, and pacing development in line with regulatory, market and implementation constraints.
Operating decisions were grounded in pragmatic execution considerations and a clear risk-tolerance framework, ensuring that day-to-day actions remained feasible while improving long-term asset condition, cost exposure and meeting compliance requirements. This measured approach ensured initiatives were sequenced to support the Group's longer-term strategic trajectory while delivering steady operational outcomes amid a challenging operating landscape.
Energy
The Energy business sustained dependable generation under long-term Power Purchase Agreements (PPAs) while progressing a renewable energy (RE) pipeline aligned with Malaysia's broader energy transition agenda. National policy frameworks such as the Malaysia Renewable Energy Roadmap (MyRER) provide useful direction on the country's long-term RE ambitions, supporting the development of solar and small hydropower projects while maintaining system affordability and grid stability.
As Malaysia increases the share of solar and hydro in its generation mix, grid conditions and integration requirements continue to influence project timelines, particularly for large-scale solar. Higher solar penetration requires closer coordination with grid studies, connection approvals and system readiness to ensure projects are brought online in a stable and orderly manner.
These operational realities require Malakoff to systematically balance RE growth with the reliability provided by its thermal fleet. As a result, development strategies within the Energy business remained grounded in what could be executed reliably under prevailing technical, commercial and system constraints, ensuring the Group contributes to national transition goals while maintaining dependable generation in its portfolio.
A large industrial power plant, likely a thermal power station, is shown at night. The facility is brightly lit by numerous artificial lights, creating a stark contrast with the dark blue twilight sky. A tall, slender smokestack with horizontal stripes stands prominently on the left. In the foreground, a calm body of water reflects the lights from the plant and the surrounding area.
Strengthening Foundations for Steady Progress
The differing characteristics of the Group's activities shaped how resources and attention were deployed throughout the reporting period. Execution centred on scale, integration and operational continuity, with progress calibrated carefully to avoid advancing ahead of regulatory or financial clarity. Capital was allocated in a deliberate, sequenced manner, supported by firm cost controls and embedded risk management practices that influenced operational planning and decision-making. Operations and Maintenance (O&M) and Project Management Services continued to serve as core execution engines of the business, directly driving project delivery and safeguarding performance standards across the business.
Overall, FY2025 was a year of consolidation rather than transformation, with the Group solidifying its operational foundations, advanced priority initiatives and maintained the flexibility needed to respond to shifts in market, policy and regulatory conditions.
The Tanjung Bin complex, situated on a 65-hectare site in Kupang, Johor, houses one of the largest IPP coal-fired stations in Southeast Asia.
Business Review: Thermal
Operating Conditions
In FY2025, operations were managed under firm regulatory expectations, persistent input cost pressure and a generally supportive demand backdrop. Operating choices reflected the Group's risk appetite, with decisions guided by what would be executed reliably under prevailing legal, commercial and technical constraints.
Thermal Plants
The Group's thermal plants continued to provide dependable capacity under established contracts, with operating plans shaped by fuel market variability and individual asset condition. Maintenance schedulings, outage coordination and parts availability were prioritised to maintain reliability and support operational and financial performance.
Renewable Energy
RE progressed in accordance with external approvals and grid connection requirements. Resources were therefore directed towards ensuring project readiness, including navigating approval processes, conducting grid studies and advancing engineering preparation to support orderly and compliant project progression.
Complementary Functions
Thermal and RE assets fulfilled complementary functions, with thermal generation providing baseload reliability and earnings, while RE contributed measured diversification aligned with the Group's transition trajectory.
Cost Efficiency
The Group maintained a firm focus on cost efficiency, supported by tighter O&M practices, more deliberate procurement decisions and embedded risk oversight in operational planning. Collectively, these decisions shaped an intentional period of consolidation that maintained operational resilience and preserved strategic flexibility.
Malakoff steadies the grid with essential thermal assets while driving renewables forward, managing energy transition risk with a balanced, future-ready approach.
Business Review: Thermal
Link to the External Environment
Regulatory and Policy Context: Managing a Tightening Framework
Malakoff's planning, maintenance and project sequencing continued to align with evolving approval requirements, grid access protocols and compliance expectations. Plans to introduce carbon pricing in 2026 by the Ministry of Finance, marks a structural shift in the policy landscape, reframing emissions from a voluntary consideration to a cost and regulatory obligation that now materially shapes investment, dispatch and asset strategy. Targeted sectors are iron, steel and power producers, which are the largest contributors to the country's carbon footprint. At the same time, early-stage policy discussions on nuclear power beyond 2030 signal a potential future pathway for low-carbon baseload power, though no deployment decision has yet been made.
Energy System Structure: Balancing Reliability with Transition
Malaysia's power mix remains anchored by fossil fuels, with gas and coal still forming the core of electricity supply, even as coal's role gradually recedes. Within this structure, gas continues to function as the transition fuel, providing the flexibility, reliability and grid stability needed as the intermittency of RE expand. Malakoff's portfolio positioning reflects this reality by sustaining dependable thermal generation while progressively integrating more renewable capacity within existing system constraints.
Market and Demand Dynamics: Rising Load, New Drivers
Electricity demand is on an upward trajectory, underpinned by data centre growth, industrial expansion and broader digitalisation of the economy. This has reinforced the importance of secure fuel supply, efficient O&M management and rigorous procurement practices. Operating choices increasingly factor in fuel price volatility, contractor's performance and supply reliability to protect margins while meeting contracted offtake commitments.
Technology and Infrastructure Shift: Enabling Higher Renewables
The power system is moving towards greater grid modernisation, digital management and the deployment of energy storage systems to accommodate higher renewable penetration and rising peak demand. Large scale solar (LSS) and rooftop solar installations continue to expand rapidly, supported by national programmes such as LSS tenders and Net Energy Metering (NEM), which enables consumers to generate their own solar energy and export excess electricity to the grid under regulated compensation mechanisms. Together with corporate PPAs, these mechanisms are accelerating distributed solar adoption among industrial, commercial and institutional users. Malakoff is adapting to this environment by ensuring its assets remain compatible with a more flexible, decarbonising grid by improving technical readiness, expanding support for NEM-enabled rooftop portfolios and maintaining system stability as renewable penetration increases.
Social Licence to Operate: Continuity, Safety and Stakeholder Trust
Reliable service delivery and operational safety are key drivers of Malakoff's social performance, particularly for communities and industries reliant on stable grid supply. As the energy transition accelerates, maintaining dependable baseload capacity alongside growing renewable generation has been essential in maintaining stakeholder's confidence, investor credibility and contractual commitments.
Environmental Positioning: Managing Transition Risk
Malakoff's portfolio decisions continued to moderate transition risk by keeping essential thermal assets available for grid stability while advancing renewable investments, where permitting, land access and infrastructure allow. This dual-track approach balances near-term system reliability with longer-term decarbonisation objectives in a practical, commercially grounded manner.
Malakoff continues to stand tall as a leading IPP in Malaysia, powering the nation with reliable energy solutions while advancing sustainability and innovation.
Business Review: Renewable Energy
Renewable Energy (RE)
Large Scale Solar (LSS)
Renewable Energy Certificates (RECs)
Battery Energy Storage System (BESS)
Biomass
Small Hydropower (SHP)
Commercial & Industrial (C&I) Solar
Carbon-Free Mobility Infrastructure
Malakoff is scaling its renewable portfolio, aligning with the Malaysia's National Energy Transition Roadmap (NETR), which charts the pathway to net-zero emissions by 2050. The Group's development activities also reflect MyRER, the sector-specific plan that defines technology pillars and RE capacity milestones through 2035. Malakoff's RE growth is driven by a mix of LSS projects, rooftop solar installations and three run-of-river small hydropower plants in Kelantan, each at varying stages of development and operations. Complementing these initiatives, Malakoff Radiance Sdn. Bhd. focuses on both Commercial and Industrial (C&I) solar markets.
Large Scale Solar (LSS)
Kota Tinggi, Johor | Bintulu, Sarawak | Larut and Matang, Perak
Solar Photovoltaic | 599 MW
- LSS 2 in Kota Tinggi, Johor is operational.
- LSS project in Bintulu, Sarawak is in planning and development stage.
- LSS PETRA 5+ development in Larut and Matang, Perak remain at early-stage planning and development.
Commercial & Industrial (C&I) Rooftop Solar
Various Locations, Malaysia
Solar Photovoltaic | 61 MW
- Ongoing installations, project rollouts and new C&I customer onboarding.
- Total secured in 2025: 5 sites with 6 MW capacity
- Total installed in 2025: 13 sites with 7.4 MW capacity
Hydropower
Sungai Galas, Kuala Krai, Kelantan | Kemubu SHP 29 MW | Kuala Geris SHP 25 MW | Serasa SHP 30 MW
Run-of-river SHP | Total SHP: 84 MW
- Under development/in construction
Business Review: Renewable Energy
RE Operational Results
Malakoff's small hydropower projects in Kelantan are progressing steadily, with three run-of-river plants currently under development following financial close. Designed with minimal environmental impact, these projects support the Group's renewable growth strategy and are expected to contribute to emissions reduction once operational.
Large Scale Solar (LSS) — Solar Power Generation 2025 (MWh)
For Contract Year 7 (2025), the ZEC Solar Plant recorded a cumulative generation of 36,242 MWh against its Declared Annual Quantity (DAQ) of 47,614 MWh, surpassing the minimum 70% threshold of 33,330 MWh required under its Solar Power Purchase Agreement (SPPA). This confirms that the plant met its contractual generation obligations for the year.
Through the acquisitions of ZEC Solar Sdn. Bhd. and TJZ Suria Sdn. Bhd. in January 2025, the Group expanded its renewable energy footprint with a fully contracted 29 MW large-scale solar asset in Kota Tinggi, Johor. The facility operates under Malaysia's national LSS programme and is backed by a 21-year SPPA extending to 2040, ensuring stable long-term revenue visibility as it supplies RE to the grid.
Commercial & Industrial (C&I) Solar — Solar Power Generation 2025 (MWh)
Business Review: Renewable Energy
Performance Review
In FY2025, Malakoff's Energy business delivered generally steady and dependable operating outcomes, underpinned by consistent operational rigour across the portfolio, despite some challenges in the final quarter of 2025. We focused on meeting contractual obligations while carefully managing cost pressures, fuel dynamics and evolving regulatory requirements. Operational efficiency continued to be prioritised to optimise asset performance, improve maintenance procedures and lift day-to-day execution quality. These collective actions supported the Group's financial stability while ensuring the Energy segment continued to play its critical role in sustaining national reliability.
As the largest IPP in Malaysia, our thermal assets in Malaysia and overseas deliver a combined generating capacity of 8,782 MW. In November 2025, the Group received notification of its successful bids under the Energy Commission's (EC) Request for Proposal Category 1 for the Extension of Existing Facilities.
Following this, the EC approved the continuation of operations for all three major gas plants: Segari Energy Ventures (SEV, 1,303 MW) was granted an extension covering 1 July 2027 to 31 December 2029, GB3 (429 MW) received approval for the period 1 January 2027 to 31 December 2029, and the Prai Power Plant (PPP, 350 MW) was awarded an operational extension running from 1 April 2026 to 31 March 2030. New PPAs will be entered into with TNB for each plant, allowing Malakoff to generate the required capacity and deliver electricity throughout the extension period. These extensions enable operational continuity, greater revenue visibility and a stronger foundation for ongoing asset optimisation.
During the reporting period, the thermal fleet performance varied due to differences in plant age and operating history. Older units required more intensive outage planning, maintenance scheduling and resource deployment, while newer plants performed more consistently. Fuel availability and price movements further influenced operating strategies, requiring close coordination between operations, maintenance and commercial teams to optimise utilisation, manage cost exposure and align maintenance timing with market exposure.
Reliability within our power plants were upheld through disciplined maintenance, strong asset management and enhanced technical and process controls that ensured smooth, stable daily operations.
Malakoff continues to engage with the stakeholders on the future plans for biomass Co-Firing in its generating asset to support the nation's aspiration towards Net Zero Carbon Emission by 2050. In parallel, the Group continues benchmarking international co-firing practices, particularly from Japan and Europe, to determine scalability potential, equipment optimisation and long-term feasibility. Future progress will depend on sustainable biomass sourcing, appropriate funding structures and a viable mechanism for recovering fuel-related costs.
Renewable assets continued to perform in line with the current size and maturity of the portfolio. Operating projects delivered stable output, while development-stage initiatives, particularly in LSS and hydropower, progressed as planned, subject to regulatory approvals, grid connectivity and site-specific requirements. Execution quality and compliance remained a priority to ensure project readiness for subsequent development phases.
Key Initiatives and Developments
For thermal assets, risk-based maintenance planning and asset integrity management were enhanced, with particular attention to ageing plants. The improved coordination between operations and maintenance functions enabled more effective outage planning, lowered operational variability and contributed to sustained plant availability. Better oversight of contractors, procurement and O&M expenditure supported tighter financial controls and ensured continued adherence to safety and performance standards.
Fuel management was actively integrated into operational decision-making. In response to evolving gas supply and pricing conditions, plant scheduling and maintenance planning were more closely aligned to fuel risk exposure, supported by stronger collaboration between commercial, operations and maintenance teams.
The RE sector, particularly solar energy, continued to play a pivotal role in advancing the national energy transition agenda and long-term sustainability objectives. Supported by clear policy direction, increasing environmental consciousness and rising demand for cleaner energy solutions, solar remained one of the most actively developed renewable technologies during the financial year.
The upcoming development of the 470 MW LSS PETRA 5+ project highlights our trusted expertise in RE delivery and our ability to execute long-tenure PPAs with reliability and operational rigour.
The Group's investments in RE infrastructure contributed substantially to broader socioeconomic development, stimulating supply-chain activity, catalysing job creation and spurring the growth of domestic industries. By expanding access to clean energy and reducing reliance on fossil fuels, Malaysia's shift towards a low-carbon economy were further accelerated. Through the continued development of clean energy solutions, the Group reinforced national energy security and laid the groundwork for sustained environmental and socioeconomic benefits, aligning operational execution with Malaysia's long-term sustainability ambitions.
Despite a challenging operating environment, the solar energy segment continued to demonstrate strong performance and adaptability. Ongoing innovation, prudent cost management and a supportive policy landscape are expected to further drive the sector's contribution to energy security, economic development and carbon reduction targets in the years ahead.
Business Review: Renewable Energy
Challenges, Mitigation & Key Achievements
Cross-functional coordination between O&M and Project Management Services led to clearer lines of accountability, firmer risk oversight and consistent execution throughout the Energy business.
Thermal — Challenges & Mitigation
! Achieve On-Time Execution of All Scheduled Outages
Meeting outage timelines to safeguard plant availability, manage operational risks and prevent downstream impacts on reliability and contractual performance.
✓ Mitigation: Coordinated with the Grid System Operator and key stakeholders to optimise planned outages. Developed efficient schedules for outages. Held daily meetings for quick issue resolution and escalation, as needed.
! Manage Manpower Turnover and Shortages Before PPA Extension
Balancing workforce stability, capability retention and resource planning to sustain operational effectiveness during periods of organisational transition.
✓ Mitigation: Facilitated internal staff reassignment and new recruitment. Implemented staff training and development initiatives.
! Handling High Cyclic Operations
Managing equipment stress, operational variability and maintenance demands associated with frequent cycling to ensure reliability and cost efficiency.
✓ Mitigation: Executed strategies to ensure successful startup of gas turbine and steam turbine. Distributed operating hours of gas turbines evenly to optimise maintenance costs.
Thermal — Key Achievements
- Received notification of success under the EC Category 1 competitive bidding exercise in November 2025.
- The EC granted extensions for SEV (1 July 2027 to 31 December 2029), GB3 (1 January 2027 to 31 December 2029) and PPP (1 April 2026 to 31 March 2030).
- The PPA for PPP was duly executed during the first quarter of 2026 and subsequently, new PPAs will be entered into with TNB for SEV and GB3.
- Executed the enhanced borescope inspection with OEM for gas turbines and minor overhaul for generators to extend reliability of the machinery.
- Implemented Department of Occupational Safety and Health Kaedah Pemeriksaan Secara Teknologi Termaju methodology for inspection of Unfired Pressure Vessels, facilitating the successful renewal of Certificate of Fitness for the TBPP U10 and U30 units without requiring shutdown.
- Utilising the eSwis V2 system by the Department of Environment for TBPP fly ash offtake, becoming the first coal fired power plant in Malaysia using the newly implemented system.
Extensions across three of the Group's thermal gas plants signal a trusted operating cadence defined by reliability, efficiency and long-term continuity.
Renewable Energy — Challenges & Mitigation
âš Regulatory and Policy Adjustments
Changes in national energy policies and regulatory frameworks created uncertainty for project planning and investment decisions.
✓ Strengthened Regulatory and Stakeholder Engagement: Proactive engagement with regulators and policy makers to ensure alignment with evolving requirements and facilitate smoother approvals.
âš Project Approval and Grid Connection Constraints
Lengthy approval processes and limited grid capacity slowed project progression and caused scheduling constraints.
✓ Enhanced Project Planning and Risk Management: Earlier site assessments, detailed grid studies and structured risk management practices to improve readiness and execution certainty.
âš Supply Chain Volatility
Fluctuations in equipment availability.
✓ Diversified and Strategic Procurement: Broader sourcing strategies, long-term supplier arrangements and closer collaboration with technology providers to reduce supply chain exposure.
âš Rising Capital and Financing Costs
Higher financing costs, inflationary pressures and tightening financial conditions.
✓ Optimised Financial Structuring: Alternative financing mechanisms, disciplined capital planning and cost management strategies to mitigate rising costs.
âš Land and Permitting Constraints for Utility Scale Projects
Securing suitable land and navigating multi agency permitting requirements posed delays for large scale developments.
✓ Improved Land and Permitting Strategies: Early stakeholder engagement, streamlined land identification and closer coordination with local authorities.
âš Intermittency and Grid Stability Considerations
The variable nature of solar generation, combined with higher Variable Renewable Energy (VRE) penetration, introduced operational and grid stability challenges.
✓ Integration of Storage and Digital Technologies: Deployment of energy storage systems, digital monitoring tools and operational optimisation to enhance reliability and support grid stability.
Renewable Energy — Key Achievements
- Sustained growth in solar deployment, with strong uptake within commercial, industrial and institutional users driven by policy support, rising sustainability commitments and demand for cost optimised energy solutions.
- Successful deployment across multiple public and community spaces, expanding into the hospitality and logistics industries to drive the adoption of clean energy solutions.
- Growing demand for rooftop and on-site solar solutions continued to lower energy costs, mitigate tariff volatility and support emissions reduction efforts, aligning with the Group's ongoing expansion of its RE portfolio, including new solar capacity added in 2025.
- Successful execution and timely commissioning of multiple solar projects, reflecting stronger project management discipline, enhanced coordination and improved the value chain delivery capabilities.
- Technology advancements in higher efficiency modules and smarter monitoring systems, improving energy yield, operational visibility and long-term asset reliability.
Business Review: Renewable Energy
Outlook and Prospects
Malakoff's thermal portfolio will continue to play a stabilising role in the national power system, particularly as Malaysia navigates a period of heightened energy transition, tightening regulations and ongoing cost pressures. In the years ahead, the Group will focus on sustaining dependable operations of its thermal plants by managing asset age profiles, fuel conditions and compliance obligations with greater precision.
Thermal Fleet Priority
Priority will be placed on maintaining high availability through proactive maintenance planning, well-sequenced outages and closer monitoring of operational activities. As plants mature, balancing reliability, cost efficiency and operational risk will remain a key consideration to ensure continued performance under long-term contractual arrangements.
Transition-Aligned Initiatives
Thermal operations will also advance transition-aligned initiatives in a measured and practical manner. Efforts to expand biomass co-firing, enhance emissions management and assess future decarbonisation pathways will continue, subject to technology readiness, fuel security and viable cost-recovery mechanisms.
RE Segment Growth
The RE segment is expected to continue progressing in a coordinated manner, guided by regulatory approvals, grid readiness and evolving system constraints. Solar will remain a major growth avenue, supported by clear policy direction, rising demand for cleaner energy solutions and stronger market acceptance.
Supporting Technologies
Investments in supporting technologies such as energy storage, digital monitoring systems and operational optimisation tools, are expected to enhance future system stability and improve asset performance as renewable penetration grows.
Looking ahead, the Energy segment is positioned to deliver a responsible and orderly transition, sustaining dependable thermal operations while advancing renewables in line with approvals, grid readiness and system needs. Achieving this will require close collaboration with regulators, policymakers and industry partners to scale transition technologies, manage execution risks and preserve long-term value creation, all in support of Malaysia's Just Energy Transition.
Through the LSS PETRA 5+ programme, Malakoff is driving one of the nation's largest solar expansions, unlocking approximately 967,544 MWh of clean electricity annually and supporting Malaysia's renewable-energy goals upon completion in 2028.
Business Review
Electricity Distribution and District Cooling System
Malakoff Utilities Sdn. Bhd. (MUSB), a wholly-owned subsidiary of Malakoff, serves as a key utility provider in Malaysia's electricity distribution and district cooling landscape. MUSB supplies electricity to the 72-acre KL Sentral development under an exclusive license of up to 153 MW and operates a District Cooling Plant that delivers chilled water to 10 commercial and residential buildings within the transit hub. This integrated model enhances system efficiency and provides more sustainable cooling compared to conventional building-level systems.
Enhance the Reliability of Electricity Distribution Network System
Optimise Chiller Maintenance Costs While Maintaining Plant Reliability and Performance
Refine Payment Collection Processes to Boost Efficiency
Continuously Enhance the Condition of Supply Agreement and Customer Charter
In 2025, both electricity and chilled water demand remained stable within the KL Sentral network. The restructuring of electricity tariffs, implemented on 1 July 2025, contributed positively towards MUSB's financial performance by improving revenue stability and supporting profitability despite the flat consumption profile.
Performance Review
During the reporting period, MUSB recorded strong safety performance, achieving 1,157,904 safe manhours as of December 2025, supported by ongoing initiatives to ensure zero loss time injury and enhancements to the fire fighting system. Financial outcomes also improved, with EBITDA, PBT and PATMI increasing, driven by cost saving initiatives and the implementation of the new Restructuring Electricity Tariff, which further enhanced dividend distribution. Customer service improvements were also advanced with the new Malakoff Utilities landing page, including the implementation of the new tariff structure for customer billing beginning 1 July 2025.
Operational efficiency was enhanced through targeted reliability improvements. Key efforts included implementing changes to the power supply sources incoming from TNB into the KL Sentral area, as well as commencing the installation of an additional 33 kV power cable to reinforce supply reliability within the KL Sentral network. In parallel, more effective billing and credit control processes were instilled by streamlining payment collection, ensuring that aging continued to remain within acceptable parameters.
MUSB decommissioned its previous website in August 2025 and launched a new landing page to enhance customer accessibility and service transparency.
Challenges & Mitigation
Secured additional power supply from TNB to meet increasing load demand
✓ Coordinated with TNB to ensure an additional 33 kV power supply from PMU Menara 118
Managed the rise in maintenance cost driven by increasing raw material prices
✓ Undertook extensive cost reduction initiatives to effectively manage maintenance expenditures
Implemented e-Invoicing imposed by the Inland Revenue Board
✓ Pursuant to the system upgrade, measures were implemented to ensure the effective issuance and adoption of e-Invoicing
Limited availability of payment channels for bill payments
✓ Currently, the available payment channels include Maybank online banking, JomPAY, cheques and debit and credit cards. We are exploring additional payment methods commonly used by utility providers, particularly options that support mobile applications and overseas transactions.
Key Achievements
- The year saw strong operational achievements, with MUSB delivering consistent reliability in both electricity and chilled water supply and maintaining zero major equipment breakdowns in its plant operations.
- Service quality also remained exemplary, reflected in a 93% Customer Satisfaction Index score, underscoring the company's commitment to performance excellence and responsive customer engagement.
Outlook and Prospects
The Government's redevelopment of Sentral Station, undertaken with the Ministry of Transport, UKAS and MRCB, is expected to significantly increase utility demand in the KL Sentral development area, beginning in 2026. In anticipation, MUSB will prioritise optimisation of district cooling plant efficiency and augmenting the reliability of electricity distribution to support the area's growing load requirements. On the customer service front, MUSB plans to introduce a SmartApp to enable cashless transactions and enhance communication, improving convenience and overall user experience.
Powering KL Sentral around the clock, MUSB's integrated electricity distribution and district cooling system ensures uninterrupted reliability and sustainable comfort for one of Malaysia's busiest transit hubs, delivering 24/7 performance that keeps the city moving.
Business Review
Operations and Maintenance (O&M)
As part of the Group's Energy operations, O&M has become an integral execution engine that underpin the performance, reliability and delivery of energy and plant-related projects. The division has expanded beyond traditional support functions, evolving into core operational capabilities that directly drive asset performance, outage efficiency, project delivery and long-term value creation. By coordinating closely with plant operations, engineering teams and commercial functions, O&M ensures disciplined execution, technical excellence and project certainty, reinforcing Malakoff's ability to sustain dependable generation while progressing strategic development initiatives aligned with the Group's transition pathway.
Disciplined Outage Management and Early Intervention
Structured Performance Oversight
Stronger Cross-functional Coordination
Malakoff Technical Solutions Sdn. Bhd. (MTSSB) continued to provide essential technical depth and operational support across the Energy and Environmental Solutions segment. Since its establishment in 1993, MTSSB has developed broad capabilities integrating multiple technologies, delivering operational oversight and technical services for thermal power plants, RE facilities, cogeneration units as well as utility-scale and rooftop solar projects. As a wholly owned subsidiary, MTSSB plays a key role in upholding Malakoff's operational standards while aligning its practices with the Group's Environmental, Social and Governance (ESG) ambitions.
Drawing on its extensive technical expertise, MTSSB supports a wide spectrum of O&M activities, combining practical field experience with standardised processes to maintain asset reliability and compliance. Its teams carry out inspection, repair, performance improvement and maintenance work at the Group's operating sites, contributing to safer, more resilient and better optimised plant operations over the long-term.
O&M remained a critical enabler of asset performance and reliability with FY2025 efforts directed at sustaining asset availability, managing planned outages efficiently and meeting stringent operating and safety standards. Greater emphasis was placed on cross functional planning and coordination, particularly for assets requiring heightened attention due to condition related considerations, outage windows or operating constraints. Early intervention, disciplined execution and robust performance oversight helped safeguard reliability outcomes and contain the operational impact of unplanned events.
Leveraging its capabilities in O&M, Maintenance, Repair and Overhaul (MRO), technical training and project management, MTSSB supported both the Group's asset level needs and its long-term strategic ambition of achieving net zero carbon emissions by 2050.
During the year, MTSSB successfully completed the Maintenance and Operations training programme for PETROS. Its MRO performance remained stable, underpinned by ongoing inspection and non-destructive testing (NDT) contracts with key clients. Service delivery continued to align with contractual requirements, with consistent focus on safety, quality assurance and regulatory compliance, even as the business navigated resource and scheduling constraints.
Challenges & Mitigation
! Manpower availability for specialised maintenance scopes
✓ Workforce planning was strengthened, manpower allocation across projects was optimised and coordination with internal teams and contractors was enhanced to ensure adequate technical coverage.
! Tight project schedules and rapid turnaround requirements
✓ Advance maintenance planning was improved, project scheduling controls were strengthened and close coordination with clients was maintained to ensure timely mobilisation and execution.
! Geographically dispersed operational sites
✓ Coordination between site teams was enhanced, mobilisation planning was improved and internal technical resources were leveraged to ensure timely support for critical works.
! Cost pressures and competitive service environment
✓ Cost control measures were implemented, operational processes were optimised and technical troubleshooting efficiency was improved to maintain service quality while managing costs effectively.
! Increasing complexity of asset maintenance requirements
✓ Technical readiness was further developed, knowledge sharing within the team was expanded and specialised competencies were built to support evolving operational needs.
Key Achievements
- Successfully completed the Maintenance and Operations training programme for PETROS
- Secured a two-year contract with Tenaga Nasional Berhad (TNB) Remaco, a subsidiary of TNB Power Generation. (TNB Repair And Maintenance Sdn. Bhd.) for NDT Services (2025–2027)
- Completed the extension of the existing contract with Malaysia Marine and Heavy Engineering in April 2025 (contract period 2023–2025)
- Completed LPP-Block2: 6.6 kV & LV circuit breaker services in April 2025, TBEP: OCEF protection relay calibration in June 2025 and Port of Tanjung Pelepas: 22 kV SIEMENS switchgear rectification in November 2025
- Continued provision of Inspection and NDT services for Tanjung Bin Complex, covering TBPP and TBEP
Outlook and Prospects
The outlook for the O&M Division remains encouraging, supported by sustained demand for operations, maintenance, inspection and asset-integrity services spanning Malakoff's diverse operating footprint. The team will continue sharpening its operational delivery through improved efficiency measures, uninterrupted service performance and uncompromising safety and compliance practices.
As the Group's asset base evolves, O&M will play an increasingly central role in supporting upcoming projects, including major thermal, renewable and environmental-infrastructure developments. Entrenching technical readiness, deploying skilled personnel and enhancing maintenance planning will be essential to ensure seamless integration with the Group's wider project pipeline. This includes providing early-stage technical input, commissioning support and specialised O&M capabilities for new facilities as they progress towards commercial operation.
Growth prospects will be driven in part by deeper engagement with existing clients, with the aim of expanding service coverage and securing larger, multi-year O&M scopes. However, expansion at geographically dispersed sites will require more agile workforce planning and targeted talent development to ensure the availability of qualified personnel for critical assignments.
At the same time, the Division aims to broaden its presence in the power as well as oil and gas sectors by actively identifying opportunities in MRO work. Responding swiftly to client needs while remaining competitive on pricing and without compromising on service quality, will continue to be a key differentiator. The O&M Division will prioritise careful coordination of maintenance strategies, supported by applying stricter controls for project scheduling, resource deployment and technical troubleshooting, to reinforce its reputation as a dependable service provider. O&M is well positioned to support the Group's operational resilience and future growth, underpinning Malakoff's broader transition strategy through reliable service delivery and deep technical capability.
Business Review
Project Management Services
Malakoff has always placed strong emphasis on its project delivery capabilities, applying them not only to new power plant developments but to all projects across the organisation to ensure timely, on-budget, and within-scope completion. Achieving strategic goals requires strong execution capabilities to translate ideas into measurable results. With over 25 years of experience from supporting complex deliveries, Malakoff has developed proven expertise in managing the full life cycle of complex power plant projects, from design and construction to commissioning.
Structured Project Planning and Governance
End-to-end Oversight to Ensure Delivery within Approved Scope, Schedule and Budget
Strengthened Risk Management and Integration Planning
Cross-functional Coordination Across Project Teams
Protecting Operational Continuity and Maintaining Asset Reliability
In line with the Group's evolving priorities, the scope has expanded into emerging areas such as Waste-to-Energy (WTE), Large Scale Solar (LSS), small hydropower (SHP) and battery energy storage systems (BESS). Development in these areas further strengthens support for Malakoff's transition initiatives while building valuable experience across the organisation.
Performance Review
Project Management Services has become an integral part of the Group's growth strategy, orchestrating the planning, integration and execution of major developments that cover a wide range of technologies and project phases. Teams were accountable for planning, cross-functional coordination and end-to-end oversight to keep initiatives within approved scopes, schedules and budgets, risk control and integration planning to avoid disruption and safeguard reliability.
While several projects were secured during the reporting period, the team is now actively managing six major projects at varying stages of maturity:
1
Two 1,400 MW CCGT Developments
One in the south and one in the north of Peninsular Malaysia, progressed through development planning, laying the groundwork for future baseload efficiency and system reliability.
2
1,056 TPD/22 MW WTE Facility — Sg. Udang, Melaka
Construction activities commenced for the WTE facility in Sg. Udang, Melaka.
3
470 MW LSS PETRA 5+ — Perak
Currently in the planning and approval stages.
4
100 MW LSS Project — Sarawak
Currently in the planning and approval stages.
5
84 MW SHP Projects — Kelantan
Currently under construction, which will add flexible, run-of-river generation to the portfolio.
Delivering this pipeline requires early alignment on engineering interfaces and long-lead procurement. The CCGT project teams adopted proactive OEM engagement to secure production slots for critical equipment, validated technical requirements up front, and coordinated closely on delivery schedules and logistics to reduce the risk of slippage, particularly important given global supply-chain constraints on major equipment such as gas turbines.
The focus remains on execution grounded in established protocols, maintaining rigorous stage-gate governance and aligning project readiness with approvals and grid timelines. This integrated approach enables the Group to translate development plans into bankable projects while protecting operational performance and positioning the portfolio for orderly, value-accretive growth.
Challenges & Mitigation
! Securing major equipment with long manufacturing lead times, particularly critical components such as gas turbines, driven by global supply chain constraints, stringent technical specifications and the limited number of qualified OEMs
✓ Adopted a proactive procurement and engagement strategy. Initiated early stage negotiations with OEMs to secure production slots. Coordinated closely on engineering interfaces, delivery schedules and logistics. Strengthened delivery certainty and reduced exposure to schedule slippage through earlier and more strategic OEM engagement.
Key Achievements
- Submitted feasibility studies for both 1,400 MW CCGT projects to the relevant authorities, with one project having already secured the EIA approval
- Achieved significant construction progress for the SHP sites in Kelantan, reflecting steady advancement through planned development milestones
- Signed SPPA for the 470 MW LSS PETRA 5+ project in Perak
- Signed SPPA for the 100 MW LSS Sarawak project
- Commenced site clearing and preparatory works for the WTE facility in Melaka, marking the transition into early construction activities
Outlook and Prospects
The two upcoming 1,400 MW CCGT projects are expected to play a pivotal role in reinforcing Malakoff's conventional energy portfolio. Once completed, these plants will provide dependable baseload capacity, shoring up system reliability and support Malaysia's long-term energy security objectives. Their scale and efficiency will also enhance operational resilience as the national energy mix transitions toward lower carbon sources.
In parallel, the Group's RE pipeline, including the 470 MW and 100 MW LSS projects, as well as the 84 MW SHP developments, will broaden the earnings mix and provide meaningful alignment with Malaysia's RE targets and decarbonisation agenda. These projects collectively position Malakoff to accelerate its presence in clean energy generation while diversifying revenue streams that involve multiple technologies and locations.
This balanced pipeline of conventional and RE projects positions the Group for continued growth, operational resilience and alignment with Malaysia's evolving energy transition pathway.
Strong coordination and meticulous oversight ensures timely delivery while protecting the integrity of operating assets.
Business Review: Environmental Services
Operating Conditions & Key Assets
The Environmental Solutions business comprises both concession-based and non-concession waste management activities delivered through key subsidiaries, including Alam Flora Sdn. Bhd. (Alam Flora), Alam Flora Environmental Solutions Sdn. Bhd. (AFES) and Genesis Facilities Solutions Sdn. Bhd. (Genesis). In addition, on 28 February 2025, Malakoff, through its wholly-owned subsidiary Tuah Utama Sdn. Bhd., completed the acquisition of a 49% equity interest in E-Idaman Sdn. Bhd. in accordance with the terms of the Share Sale Purchase Agreement with Metacorp Berhad, further expanding the Group's operational footprint, strengthening its portfolio of environmental services and extending its waste management presence into the northern region of Peninsular Malaysia.
Regulatory requirements, contractual frameworks and the need to ensure consistent service delivery across multiple sites defined the portfolio's operating environment in FY2025. These conditions demanded tightly coordinated operating practices to meet contractual and regulatory obligations. Day-to-day operational decisions were guided by the imperative to uphold service reliability over a geographically dispersed portfolio, all while balancing cost pressures and operational complexity.
Circular Economy
Expansion of Concession Business
Non-Concession Business
Infrastructure Cleansing & Waste Solutions
Waste Management Facilities
Waste-to-Energy (WTE)
Facility Management
Marine & Scheduled Waste Management
On 19 June 2025, Malakoff's subsidiary, Sungai Udang WTE Sdn. Bhd. entered into a Concession Agreement with the Ministry of Housing and Local Government and Solid Waste and Public Cleansing Management Corporation for the development of a WTE facility at Sungai Udang, Melaka. The agreement covers the design, construction, financing, operation, maintenance and eventual closure of the facility. The project forms part of the Government's long-term waste management strategy, delivering sustained fiscal value over its 34-year concession period, while supporting national waste reduction objectives and generating 22 MW of renewable energy to the grid. Subsequently, on 13 November 2025, SUWTE signed the Engineering, Procurement, Construction and Commissioning (EPCC) Contract with a consortium comprising Jurong Engineering Limited, Kanadevia Corporation, Equator Engineering Sdn. Bhd. and Alam Hzem Sdn. Bhd. Financial close is expected to take place in mid-2026 under a Sukuk programme, after which construction will commence, with an estimated duration of three years, targeting operational commencement in 2029.
Key Assets and Initiatives
Alam Flora Sdn. Bhd.
Location: Kuala Lumpur, Putrajaya and Pahang
Waste Collection (domestic and recyclable waste from residential and commercial areas) and Public Cleansing (road sweeping, public drains cleansing, grass cutting, public beaches and markets).
Concession | 22 years | 3,805 TPD
Environment Idaman Sdn. Bhd. (E-Idaman)
Location: Kedah and Perlis
Solid Waste Management and Public Facilities Cleansing. Waste Collection, Transportation, Street Cleaning, Landfill Operations and Environmental Maintenance Services. Integrated Waste Management Services.
Concession | 22 Years | 1,500 TPD
Sungai Udang WTE Sdn. Bhd. (SUWTE)
Location: Sungai Udang, Melaka
34-year Concession Agreement. Construction Scheduled to Commence in Q2 2026. Target Operational Date: 2029.
1,056 TPD | ~22 MW of RE
Alam Flora Environmental Solutions Sdn. Bhd. (AFES)
Waste Management Facility — Development, Operation & Maintenance of Waste Facilities such as Landfills, Incinerators and Leachate Treatment Plants. Industrial, Commercial and Institutional (ICI) Waste. Scheduled Waste Management. Private Waste & Recycling.
Non-Concession
Green Resource Recovery Sdn. Bhd.
Location: Kedah, Perlis, Penang and parts of Perak
Private Waste Collections — ICI Waste. Material Recovery Facility — IdamanXchange, Drive Thru Recycling Centre.
Non-Concession
Genesis Facility Solutions Sdn. Bhd.
Location: Perlis, Kedah, Selangor, Negeri Sembilan, Johor, Sabah
Integrated Facility Management — Focusing on hard and soft services. Energy Management Services — Energy Efficiency, Energy Monitoring System and Energy Management System. Government/Public Sector, Private Sector, Al-Bukhary Group Assets.
Non-Concession
Business Review: Environmental Services
Operational Sites & Performance Review
Subsidiary Profiles
Alam Flora Sdn. Bhd.
Provides municipal solid waste management and public cleansing services under long-term concession arrangements. Its operations cover Kuala Lumpur, Putrajaya and Pahang, where the company is responsible for waste collection, transportation and urban cleansing services across municipal areas.
AFES
A non-concession environmental services provider within the Group, delivering waste management and environmental solutions. Its services include the development and operation of waste facilities, scheduled waste management, private waste collection and recycling activities.
E-Idaman
Responsible for solid waste management and public cleansing services across the northern region of Peninsular Malaysia. Operating under a 22-year Federal Government concession, the company provides waste collection, transportation, street cleaning and landfill operations across multiple urban areas and 13 municipal councils in Kedah and Perlis, serving more than 350,000 premises.
Green Resource Recovery Sdn. Bhd.
Provides private waste management services primarily for the ICI sectors. Its activities include recycling, composting, landfill management and commercial waste solutions, and it operates a Material Recovery Facility while promoting circular economy initiatives through the IdamanXchange platform.
SUWTE
A special purpose vehicle jointly owned by Malakoff (60%) and AFES (40%), established to develop and operate the Sungai Udang WTE facility in Melaka. The project is undertaken under a 34-year concession covering the design, construction, financing, operation and maintenance of the facility.
Genesis Facility Solutions Sdn. Bhd.
Provides integrated facility management and energy management services across Perlis, Kedah, Selangor, Negeri Sembilan, Johor and Sabah. Its services include both hard and soft facility management, as well as energy monitoring and energy efficiency solutions for government agencies, private sector clients and Al-Bukhary Group Assets.
Performance Review
The Environmental Solutions business delivered a stable performance in FY2025, supported by continuity in core waste management operations and controlled cost management. Both concession and non-concession activities delivered consistent operating outcomes, with variations in performance due to their differing operating characteristics. Concession operations were based on long-term service obligations and defined operating parameters while non-concession activities were influenced more by contract terms, service scope and operating conditions.
These differences affected operational expenditure, operating priorities and performance drivers throughout the year. In concession-based operations, managing service delivery was the primary focus. Performance reflected the scale and maturity of these activities, supported by established operating processes and experienced teams and well-developed service routes. Route density, service coverage and operational efficiency continued to shape day-to-day outcomes and cost performance, with close oversight maintained to uphold reliability, compliance and contractual delivery standards.
Non-concession waste management activities also performed steadily, with results varying according to contract scope and customer profiles. Resource allocation and cost exposure were influenced by service intensity and technical requirements across a diverse mix of ICI clients.
WTE initiatives remained in the development stage during the year. Progress centred on technical, regulatory and commercial evaluation, with preparatory work contributing to clearer formulation of project scope, delivery requirements and long-term development considerations. These initiatives, therefore, did not contribute to operating results in FY2025 but advanced the Group's transition and decarbonisation roadmap.
Alam Flora's fleet renewal introduces modern compact trucks, delivering faster, more reliable waste collection while contributing to Malaysia's carbon-reduction ambitions.
Within this broader performance, E-Idaman contributed positively following Malakoff's acquisition of a 49% equity interest. Results were supported by continuity in waste management operations, effective cost control and consistent delivery across both concession and non-concession segments. A significant development during FY2025 was the widening of concession coverage in Perlis to include additional village areas. This required scaling up operational assets and premises, expanding E-Idaman's service footprint and reinforcing its presence within concession boundaries.
Non-concession activities performed in line with expectations, supported by a diversified portfolio of ICI contracts. During the year, the Group also secured a major new non-concession contract for solid waste collection and recycling services, further enhancing its position within the commercial client segment. In addition, recycling efforts advanced meaningfully, supported by improved sorting capabilities that strengthened material recovery efforts and contributed to the Group's broader circular-economy objectives.
During the year, Malakoff's Environmental Solutions rolled out a range of initiatives designed to raise service standards, improving financial performance and responding to Malaysia's evolving waste-management landscape. These efforts spanned tariff restructuring, cost optimisation, service-quality enhancement, recycling and circular-economy expansion, digitalisation, and the diversification of technical service offerings. Collectively, these initiatives reflect a more integrated operating approach – one that balances commercial sustainability with improved service outcomes, regulatory alignment and long-term environmental stewardship.
Tariff Revision and Concession Extension
The third-cycle tariff revision and concession extension proposal was submitted to Unit Kerjasama Awam Swasta, Jabatan Perdana Menteri (UKAS) for review prior to escalation to the Ministry of Finance. The proposal included expanded service scopes under Reformasi Pembersihan Awam, aligning the mandate with evolving national policy objectives.
Cost Optimisation and Loss Mitigation
Targeted cost-down and efficiency measures were implemented in operations, procurement and contracting, narrowing the projected financial gap for ICI accounts in 2025. This was achieved through more effective resource deployment, firmer productivity controls and proactive contract renegotiations.
Service Quality and Operational Excellence
The suite of prescribed operational initiatives that was introduced, included the Incentive C.R.E.W. programme, Hero Gaya Kerja, SweetBin, expanded mechanisation, modernisation programmes and bin tyre recycling. Through these efforts, AFES achieved stronger operational productivity and improved cost efficiency.
Digitalisation and Technology Adoption
Digital and automation capabilities were expanded to improve efficiency, transparency and asset reliability. This included the implementation of cashless recycling buy-back systems, launch of the Recyclink App, deployment of autonomous ground vehicles and drones, and standardisation of the Computerised Maintenance Management System (CMMS) to heighten operational efficiency. Alam Flora's Recyclink super-app, launched in October 2024, enhances operational efficiency by offering a cashless, reward-based digital platform that simplifies customer interaction, promotes value-chain collaboration and strengthens Alam Flora's commitment to innovation, environmental stewardship and broader ESG objectives.
Circular Economy and Landfill Diversion
Large-scale recycling and diversion initiatives were expanded to reduce landfill dependency and enhance resource recovery. Key initiatives included the MGB Bin Life cycle Recycling Programme and a refuse-derived fuel collaboration with Nestlé Malaysia, which strengthened partnerships across the value chain and supported government-led segregation programmes for municipal and domestic waste.
Revenue Diversification
AFES continues to expand its role in providing holistic environmental solutions, encompassing infrastructure cleansing, landfill management and waste treatment. To broaden its revenue base and strengthen technical capability, new service lines, including tank and vessel cleaning, pond desludging, contaminated water pre-treatment, marine waste management and scheduled-waste packaging and labelling were introduced.
C.R.E.W. Programme
The Compactor Rewards for Effort and Work Excellence (C.R.E.W.) 2025 programme is an incentive initiative by Alam Flora that recognises and motivates frontline 'heroes' responsible for cleaning and waste collection. The programme promotes high-quality service and encourages greater productivity among depot workers.
Hero Gaya Kerja
393 heroes were recognised for exhibiting professional conduct, operational discipline and safety.
SweetBin
New bin design to improve the safety of manual road sweepers during on-site work.
AFES operates the integrated Port Reception Facilities (PRF) at Johor Port to manage ship-generated scheduled waste, solid waste and sewage. Developed in accordance with the International Convention for the Prevention of Pollution from Ships (MARPOL) requirements, the facility ensures responsible and efficient on-site waste handling to safeguard marine environment. Construction and testing have been successfully completed, and the facility is now fully ready for operational deployment.
Currently under construction, the Sustainable Facility and Eco Park Centre (SAFE-T) in Kemaman, Terengganu will incorporate organic-waste composting in collaboration with local councils as part of a broader landfill-diversion strategy. Once operational, SAFE-T will provide safe treatment, storage and disposal of scheduled waste for the East Coast region, offering a more sustainable alternative that reduces transportation risks and environmental impacts. The facility operates under Department of Environment licensing and supports AFES's commitment to advancing circular-economy practices.
Business Review: Environmental Services
Challenges, Mitigation & Key Achievements
Waste and Facility Management
! Margin erosion from low-margin/loss-making contracts and price-based competition
✓ Rationalised customer portfolio through contract repricing and exit of loss-making accounts. Prioritised long-term, high-volume and margin-accretive contracts. Focused on ESG-aligned customers and leveraged sustainability credentials to differentiate from low-cost competitors.
! Revenue volatility and cost inefficiencies in recycling operations
✓ Diversified recycling initiatives, including project-based recovery with stable demand. Expanded and strengthened feedstock supply through wider collection coverage and improved source separation. Enhanced operational efficiency via improved sorting, workflow optimisation and targeted workforce training. Standardised ESG and carbon reporting using recognised digital tools.
! Rising operational costs
✓ Commenced Project Prime with solutions to address gaps with best practices. Consistent focus on areas such as overtime, repair of breakdown, fuel, rental of machinery and manpower supply to manage cost. Converted to performance-based contracts. Bundled services (hard and soft facility management) to improve margin mix. Included price adjustment clauses for labour and utilities in long-term contracts.
! Limited cost control due to centralised operations and aging assets
✓ Improved consumption efficiency through stricter route planning, fuel monitoring and driver behaviour control. Strengthened preventive maintenance via daily checks and essential-cost-only controls at loss-making facilities. New compactors, arm roll trucks and power press units were delivered under the fleet renewal programme. Implemented life cycle cost management, condition-based monitoring and early client engagement on capital planning.
! Sales and disposal of retired and dilapidated vehicles
✓ Second-hand vehicles were sold to gain higher disposal value. Increased space at depots to optimise space utilisation.
! Operational disruptions and revenue leakage in contract-based facilities
✓ Proactively monitored operational Key Performance Indicators (KPIs) and waste inflows to anticipate and mitigate deduction risks. Negotiated higher concession waste fees and revised tipping fee ceilings to safeguard operational viability. Maintained strict compliance with contractual obligations to protect revenue and avoid penalties.
! Entry barriers and capability gaps in new segments
✓ Adopted a consortium strategy to leverage partners' licences, technical track records and operating experience while building internal capability. Implemented an asset-light operating model, utilising subcontracting and leasing to mitigate capital expenditure and asset obsolescence risk. Accelerated talent acquisition by recruiting certified and experienced technical personnel to build internal expertise and operational readiness.
! Manpower shortage, skill gaps and reactive maintenance culture
✓ Developed a workforce planning and competency framework. Multi-skilled technicians (M&E, HVAC, basic BMS). Established asset criticality ranking. Implemented CMMS for scheduling, tracking and reporting. Enforced maintenance compliance audits.
RISE@KL is a semi-automated sorting facility for recyclables. AFES also manages a portfolio of specialised facilities, including RISE@KL, a semi-automated sorting facility for recyclables located in Gombak, Kuala Lumpur and FIKS, a 3R education and recycling hub in Putrajaya. Additionally, the Anaerobic Digestion Plant converts food waste into biogas and bio-fertiliser, further supporting resource recovery and sustainable waste management.
WTE — Challenges & Mitigation
! Securing competitive project financing
✓ Progressing the sukuk submission to secure long-term, cost-efficient financing and support timely financial close.
! Rising capital and financing costs
✓ Coordinated closely with financial institutions and advisors to refine capital structure to address lender requirements and ensure bankability.
! Long tenure concession obligations
✓ Enhanced financial modelling, contingency planning and cost monitoring to mitigate exposure to price volatility over the concession period.
! Physical, technical or logistical challenges at the project site may disrupt preparatory works and impact construction timelines
✓ Enhanced engagement with authorities, consultants and contractors to resolve site issues promptly and maintain project alignment.
! The project requires continuous alignment between authorities, engineering consultants and contractors, posing coordination risks
✓ Intensified focus on early stage construction readiness, with structured planning to address site related constraints and expedite enabling works.
! WTE facilities involve complex engineering, environmental and safety specifications that heighten execution risk
✓ Adopted tighter project controls, clear escalation pathways and aligned reporting structures to minimise execution risks.
! Delays in enabling works, permitting and site readiness can cascade into the construction schedule and affect overall progress
✓ Undertook regular risk reviews, contingency scheduling and early intervention strategies to maintain momentum and prevent delays.
Key Achievements
FY2025 marked a year of strong operational momentum for Malakoff's Environmental Solutions portfolio, combining dependable outcomes in core waste management operations with selective growth in new services and a decisive WTE milestone. Contract performance, operational reliability and commercial rigour were prioritised, while moving strategic initiatives forward at a controlled pace.
- In February 2025, AFES secured a RM10.3 million O&M contract for Tapak Pelupusan Maokil and commenced mobilisation for this contract at the Maokil Landfill in Labis, Johor.
- Alam Flora introduced the Recyclink App, a "super app" designed to allow users to schedule recycling collections and monitor their recycling activities.
- Genesis secured additional private-sector clients for office premise cleaning in Klang Valley and continues to seek collaborations within Southeast Asia.
- Additional rail-related cleaning services were secured by Genesis for the Shah Alam line operational launch in the third quarter of 2025.
- Genesis obtained an extension for the Diesel Multiple Unit and Intercity Trains Coaches Cleaning and Sleeperette Preparation Services in 2025.
- In 2025, E-Idaman secured a contract with Malaysia Airports Holdings Berhad for ICI, non-concession solid waste collection and recycling services.
- In April 2025, E-Idaman commissioned the AI-powered sorting system at Jitra MRF, Kedah, with the capability of processing and sorting up to 17 tonnes of plastic waste per day, enhancing material recovery rates, improving operational efficiency, and advancing circular economy initiatives.
Outlook and Prospects
The Environmental Solutions business will continue to emphasise continuity in its core waste management operations, supported by well-regulated cost management and the consistent delivery of contracted services. Both concession and non-concession activities are expected to operate within established contractual and regulatory parameters, with focus placed on fulfilling service requirements and managing operating pressures.
In the concession segment, the Group will continue advocating operational excellence through targeted digitalisation and the adoption of new technologies. Key initiatives include the progressive integration of fleet-optimisation systems, expansion of electric vehicle (EV) deployment and increased mechanisation to enhance productivity, service reliability, cost efficiency and environmental performance.
For the non-concession segment, the Group aims to deepen the integration of waste-management solutions tailored to evolving customer needs. Strategic expansion into new operational areas will position the non-concession business as a significant growth catalyst while supporting greater geographic diversification. The Group remains focused on maintaining stable and dependable operational performance while progressing development initiatives in a measured and disciplined manner in both segments.
Development initiatives, particularly those involving WTE, will progress in line with regulatory approvals, technical readiness and commercial viability. As part of this, the 1,056 TPD/22 MW WTE project in Melaka is expected to gain momentum as it transitions from site preparation into procurement and construction phases. This development marks a significant step in Malakoff's involvement in the WTE value chain and contributes to the ongoing growth of the Environmental Solutions pillar.
Overall, the business aims to maintain sound operational performance while advancing development activities in a measured and prescribed manner. This approach enables Environmental Solutions to continue delivering on existing commitments while retaining agility to respond to shifts in regulatory, policy and market conditions.
Business Review
International Operations
Malakoff's international portfolio operates within the dynamic utility landscapes of Saudi Arabia, Bahrain and Oman in the Middle East, where demand for water and electricity continues to be driven by demographic expansion, industrial growth and the climatic conditions of the Gulf region. These countries rely heavily on desalinated water to meet daily needs, with consumption patterns driven by both urbanisation and rising living standards. Electricity use remains consistently high due to year-round cooling requirements and ongoing economic development, resulting in strong, structural demand for reliable generation and water-production capacity.
The Group's Independent Water Plants (IWP) and IWPPs operate under long-term offtake arrangements with government entities or national utilities, providing predictable revenue streams and protection against market volatility. These agreements underpin stable operations, ensuring that production capacity is fully contracted and supported by established payment mechanisms.
Alignment of Overseas Assets and Investments with Business Goals
New Investment Opportunities
RE-Powered Desalination Initiatives
Strategic Alliances Across MENA
Strengthen Presence in the Water and Power Markets
Contributions were supported by Shuaibah Water & Electricity Company (SWEC) and Shuaibah Expansion Project Company (SEPCO) in Saudi Arabia, Hidd Power Company (HPC) in Bahrain, and the Muscat City Desalination Company (MCDC) in Oman, reflecting sustained demand for desalinated water and electricity in their respective markets. Operational delivery of these assets generally aligned with contracted availability and production requirements. Notably, Hidd Power Company, which had recorded impairment-related losses previously, demonstrated normalised performance from FY2024 onwards, with no further losses recognised by Malakoff, providing greater predictability within the international portfolio.
Activities across Malakoff's international operations in 2025 centred on close oversight of plant performance, risk management and selective evaluation of potential opportunities. Engagements with partners and asset companies focused on operational efficiency, adherence to contractual obligations and reviews of any restructuring requirements. Exploration of new desalination prospects remained measured, consistent with the Group's current preference to allocate capital towards domestic growth priorities rather than expanding its geographical footprint.
With an effective water production capacity of 472,975 m³ per day, the Group's overseas assets continued to meet the needs of their respective jurisdictions and remained a stable contributor to overall performance. As long-term concession-based investments, these ventures delivered continuity and steady operational outcomes rather than growth-led returns in FY2025.
Operational Results
Total Water Production (m³/day) — 2025: SIWPP: 66,009,000 | SIWEP: 4,784,098 | Al-Hidd: 104,261,592 | Al-Ghubrah: 58,697,222
Equivalent Availability Factor (%) — 2025: SIWPP: 97.13 | SIWEP: 97.70 | Al-Hidd: 96.85 | Al-Ghubrah: 95.84
Capacity Factor (%) — 2025: SIWPP: 50.25 | SIWEP: 87.66 | Al-Hidd: 69.82 | Al-Ghubrah: 84.52 | As of 31 May 2025
Performance Review
The Group's international portfolio comprises investments in IWPs and IWPPs in Saudi Arabia, Bahrain and Oman. These assets, with a combined effective water production capacity of 472,975 m³ per day, continued to play a material role in meeting regional demand, supplying clean water to an estimated 42.7 million people.
During the year, Shuaibah 3 IWPP in Saudi Arabia was formally decommissioned in May 2025, following the conclusion of its operational life cycle. Remaining assets performed in line with expectations, with operational indicators particularly availability and capacity factors, generally tracking the established business plan and technical projections.
In the MENA region, desalination remains a critical solution due to limited freshwater resources, with the industry gradually adopting more energy efficient and renewable assisted technologies. These shifts highlight the growing need for integrated expertise in both water production and power systems. Operating in this environment requires careful consideration of geopolitical dynamics, regulatory developments and market competition.
Malakoff addresses these factors through due diligence, prudent risk assessment and collaboration with established partners. Investment evaluations during the year were selective. While the team assessed several potential power and desalination related opportunities, reviews were deliberately limited in scope, indicating the Group's short-term strategic focus on strengthening its domestic portfolio rather than expanding internationally.
Business Review: International Operations
Challenges, Mitigation & Key Achievements
The Al-Hidd IWPP plays a vital role in Bahrain's energy and water security, combining high-efficiency generation with large-scale desalination capacity.
Amid a landscape that includes both state-owned utilities and international developers, Malakoff's experience in managing multi-jurisdictional assets enables the Group to participate in opportunities with informed judgment. While the emphasis remains on maintaining and stabilising current operations, the Group continues to monitor suitable prospects where its capabilities can be effectively applied. Overall, the international assets remained stable contributors to portfolio performance, supported by predictable operating profiles and long-term contractual structures.
! Strong competition from leading utilities, international trading companies and new market entrants
✓ Pursued strategic alliances with experienced partners to enhance our competitive edge. Actively collaborated with local and global financial institutions and export credit agencies to secure support.
! Heightened regulatory oversight and government attention on seawater reverse osmosis energy efficiency and its ecological effects on marine ecosystems
✓ Reinforce internal policies to align with regulatory expectations and market best practices.
! Challenges in extending the concession agreements due to policy shifts and uncertainties specific to each region or country
✓ Participated in ongoing discussions and forums with key stakeholders. Carefully evaluating risks in relation to potential returns.
! Power and water assets in the Middle East operate within a geopolitical environment characterised by regional tensions, evolving diplomatic relations and shifting regulatory and policy landscapes
✓ Active engagement with local partners and authorities, complemented by close oversight and continuous monitoring by the Group's management and technical teams, to ensure regulatory compliance and timely response to policy developments.
! Tariff uncertainty can affect revenue and cost recovery, particularly when rate adjustments do not fully reflect changes in operating expenses
✓ Operational expenses were closely monitored through efficiency initiatives and preventive maintenance, while long-term power and water offtake agreements helped stabilise revenue and mitigate tariff volatility.
! Increasing competition from established utilities, regional developers and new entrants offering diverse technical and financial capabilities
✓ Built collaborative arrangements with reputable regional and international partners to raise the quality of proposals. Engaged financial institutions and export credit agencies to improve bankability and support competitive positioning.
! Closer regulatory scrutiny on desalination technologies, including expectations around energy efficiency, environmental safeguards and marine ecosystem protection
✓ Enhanced internal governance frameworks to mirror evolving regulatory expectations and global benchmarks. Incorporated environmental considerations earlier in project planning to support compliance and sustainability outcomes.
! Operating in markets with varying political conditions, regulatory shifts and economic uncertainties, which may affect project timelines and risk exposure
✓ Continuously monitored policy developments and market conditions through structured risk assessments. Maintained active dialogue with regulators, industry bodies and project partners to anticipate shifts and adjust plans prudently. Prioritised jurisdictions with clearer regulatory pathways while applying stricter evaluation criteria for higher risk markets.
Key Achievements
- Recorded zero Lost Time Injuries and Lost Time Accidents at all international assets, including Shuaibah Phase 3 IWPP, Shuaibah Phase 3 Expansion IWP, Al-Hidd IWPP and Al-Ghubrah IWP.
- Al-Hidd IWPP successfully renewed its ISO 45001 and ISO 14001 certifications and received the Royal Society for the Prevention of Accidents (RoSPA) President's Award in 2025, recognising sustained excellence in health, safety and environmental (HSE) performance.
- Al-Ghubrah IWP attained ISO 14001, ISO 45001 and ISO 22301 certifications in 2025, demonstrating its commitment to environmental stewardship, occupational health and safety, and business continuity.
- Shuaibah Phase 3 IWPP reached its key decommissioning milestone in May 2025, marking the completion of its operational lifecycle in accordance with planned timelines.
- Malakoff International Limited (MIL) was shortlisted as a qualified bidder for the Al-Nouf IPP project by the Emirates Water and Electricity Company (EWEC) in Abu Dhabi. The project, one of the region's largest upcoming gas fired developments, entails a 3,300 MW CCGT facility to be developed on a Build-Own-Operate (BOO) basis under a 25 year PPA, reinforcing the Group's continued relevance in competitive regional tenders.