Malaysia Entering More Supportive Water Investment Cycle -- CIMB Securities
KUALA LUMPUR, Sept 28 (Bernama) -- Malaysia is entering a more supportive water investment cycle as ageing infrastructure, high water losses and rising industrial and data centre demand, as well as greater climate variability are increasing the urgency to improve water efficiency, reliability, and resilience.
In a note today, CIMB Securities said the federal government had approved RM1.7 billion under the 13th Malaysia Plan to replace about 1,800 kilometres of critical pipes from 2026 to 2030, alongside a multi-year National Non-Revenue Water (NRW) Programme.
It said sizeable projects including Langat 2 Phase 2, Rasau Phase 2, and the Northern Perak Water Supply Scheme should further strengthen water security and provide a visible pipeline for contractors, pipe manufacturers and ancillary solution providers.
CIMB Securities said Malaysia’s NRW rate stood at 37.1 per cent in 2024.
“Persistently high NRW, ageing distribution networks, and rising climate variability result in unnecessary raw water extraction, higher treatment and pumping requirements, weaker utility economics, and supply disruption risks.
“Concurrently, population growth, industrialisation, and rapid data centre development are driving structural water demand, particularly across economic corridors in Selangor, Johor, and Penang,” it added.
The stockbroking company said Malaysia’s water transition is seen broadening from purely building new infrastructure towards using existing water resources and assets more efficiently.
It said sustainable NRW reduction requires physical rehabilitation alongside smart metering, leak detection, pressure management, telemetry, analytics, and intelligent asset-management systems.
“These technologies can make water networks more visible, measurable, and manageable, improving the effectiveness of every ringgit spent on water infrastructure.
“This is aligned with the Water Sector Transformation 2040 (WST2040), which promotes digitalisation, climate resilience, integrated water-resource management, and stronger sector governance,” it said.
From an investment perspective, CIMB Securities said it favours companies positioned at either the efficiency or infrastructure-enablement layers of Malaysia’s water transition.
“Insight Analytics Bhd is among the most direct listed proxies to water digitalisation and NRW management, while Gamuda Bhd offers exposure to large-scale treatment, transmission, and water security projects.
“The key near-term risk remains the pace at which funding and policy commitments translate into tenders, project awards, and, ultimately, earnings,” it said.
-- BERNAMA