Malaysian pension fund KWAP invests USD47.56 million in district cooling venture

• KWAP commits RM190 million to Lestari Cooling Energy joint venture
• potential to generate savings of over 70,000 tonnes of CO2 emissions annually

Malaysia’s national public sector pension fund KWAP has committed up to USD47.56 million to invest in district cooling joint venture Lestari Cooling Energy, the company announced today.

The investment adds KWAP as the third partner alongside KJTS Group Berhad, a Malaysian energy management services provider, and US infrastructure investment firm Stonepeak in the venture, which focuses on district cooling and electricity distribution projects in Malaysia.

KWAP’s investment will be channeled through Dana Iklim+, described as Malaysia’s first climate-focused initiative. The joint venture expects total capitalization of up to USD0.37 billion through aggregate commitments and debt funding.

[1.00 MYR = 0.25033666 USD]

District cooling systems can reduce energy consumption by up to 50% compared to traditional cooling methods, according to the announcement. The company projects that at full deployment, the venture could generate savings of over 70,000 tonnes of CO2 emissions annually.

“We are pleased to have KWAP as an investor in Lestari Cooling Energy as we continue to scale our district cooling business,” said Azura Binti Azman, Independent Non-Executive Chairman of KJTS. “The combination of Stonepeak’s global infrastructure expertise, KWAP’s strong domestic institutional presence and KJTS’ operational capabilities position the partnership well to deliver dependable, long-term cooling infrastructure aligned with Malaysia’s sustainability and energy transformation objectives.”

Hajir Naghdy, Senior Managing Director and Head of Asia and the Middle East at Stonepeak, added: “The continued growth of Lestari Cooling Energy reflects the importance of district cooling as critical infrastructure in Malaysia and the strong opportunity set for the Company. We are excited to continue expanding the Lestari Cooling Energy platform in partnership with KWAP and KJTS to support Malaysia’s growing energy needs.”

KJTS, incorporated in June 2022, provides cooling energy management, cleaning, and facilities management services across Malaysia, Singapore and Thailand. Stonepeak manages approximately $84 billion in assets under management across infrastructure and real assets globally.

Cover photo by Sergei A on Unsplash