Budget 2020: Putrajaya to replace PPA mechanism with open market system

Finance Minister Lim Guan Eng and Prime Minster Tun Dr Mahathir Mohamad arrive in Parliament for the tabling of Budget 2020 on October 11, 2019. — Picture by Shafwan Zaidon
Finance Minister Lim Guan Eng and Prime Minster Tun Dr Mahathir Mohamad arrive in Parliament for the tabling of Budget 2020 on October 11, 2019. — Picture by Shafwan Zaidon

KUALA LUMPUR, Oct 11 — The federal government will replace the Power Purchase Agreement (PPA) mechanism to an open market system.

In tabling the Supply Bill (Budget) 2020 in Parliament today, Finance Minister Lim Guan Eng said this would enable renewable energy suppliers to compete directly in the market.

“A more transparent and open energy market would ensure electricity costs that are more competitive and reasonable to the people,” he said.

Lim said the government was also in the process of drafting a policy to achieve a national target of 20 per cent usage of renewable energy by 2025.

Therefore, in Budget 2020, he said the government has decided to extend its Green Investment Tax Incentive and income tax exemption for service providers until 2023.

“Tax exemption up to 70 per cent for a period of 10 years will be introduced to companies involved in solar leasing,” he added.

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