Pengurusan Aset Air Bhd (PAAB) has introduced Malaysia’s first sustainable Islamic finance framework incorporating blue finance elements, with Maybank Investment Bank Bhd (Maybank IB) acting as the sole sustainability structuring adviser.
From left, PAAB Chief Executive Officer (CEO) Zulkiflee Omar and right Maybank Invesment Bank Berhad Chief Executive Officer (CEO) Michael Oh-Lau.
Wholly owned by the Minister of Finance (Incorporated), PAAB plays a key role in supporting the government’s efforts under the Ministry of Energy Transition and Water Transformation (PETRA) to improve efficiency, service quality, and long-term sustainability in the water services sector.
In a joint statement, PAAB and Maybank IB said the framework is the first in Malaysia to integrate blue finance within an Islamic finance structure. It enables PAAB to issue instruments such as Blue Sukuk in line with international guidelines, including those by the International Finance Corporation (2025) and the International Capital Market Association (2023).
The framework is designed to support improvements in efficiency, resilience, and sustainability of Malaysia’s water sector, while contributing to the United Nations Sustainable Development Goals.
RAM Sustainability has independently reviewed the framework and awarded it a “platinum” rating—the highest under its second-party opinion (SPO)—confirming strong alignment with global sustainable finance standards. PAAB is the first organisation to receive this top distinction, reflecting robust governance and giving confidence to investors.
PAAB CEO Zulkiflee Omar said the framework strengthens PAAB’s role as the nation’s water asset custodian and supports sector transformation by embedding sustainability into its financing strategy.
Meanwhile, Maybank IB CEO Michael Oh-Lau said the collaboration aligns with Maybank’s ROAR30 strategy, which aims to mobilise RM300 billion in sustainable finance by 2030, including RM100 billion for new economy sectors. He added that the bank has already mobilised RM176.12 billion between 2021 and 2025.
He noted that the initiative will help address funding needs for water infrastructure while supporting efforts to reduce non-revenue water.
