Domestic Investment Accelerator Fund (DIAF) – ESG Adoption in Malaysia

The Domestic Investment Accelerator Fund (DIAF), introduced by the Malaysian Investment Development Authority (MIDA), is a strategic initiative aimed at accelerating Environmental, Social, and Governance (ESG) adoption among Malaysian-owned Small and Medium Enterprises (SMEs) and Mid-Tier Companies (MTCs). This matching grant supports companies in the manufacturing and selected services sectors as they transition towards sustainable, ethical, and transparent business practices.

Understanding the DIAF

The DIAF provides matching grants on either a 50:50 or 70:30 basis, depending on project evaluation, with a maximum reimbursable amount of RM500,000 per company. Applications submitted from 24 April 2024 onwards are eligible, subject to fund availability and government policy.

Through financial assistance, ESG self-assessment, and capacity-building programs, MIDA enables Malaysian enterprises to enhance competitiveness and sustainability while aligning with global ESG standards.

Objectives of the DIAF

The primary goal of the DIAF is to facilitate ESG adoption by assisting companies in:

Conducting validation and verification of ESG practices,
Obtaining ESG certifications and disclosures, and
Subscribing to technologies or systems that support sustainability initiatives.

By adopting ESG principles, companies can improve operational efficiency, reduce costs, strengthen brand reputation, and attract environmentally and socially conscious investors.

Eligibility

To qualify for the DIAF, applicants must meet the following criteria:

Incorporated under the Companies Act 2016 with at least 51% Malaysian ownership.
Possess a valid business license from the relevant local authority.
Have been in operation for a minimum of three (3) years.
Engage in eligible manufacturing or services activities, including:

- Manufacturing (with a valid Manufacturing Licence or exemption letter under the Industrial Coordination Act, 1975)

- Services in sectors such as:

- - Hotel & Tourism

- - Private Healthcare

- - Private Education

- - Oil & Gas Services

- - Global Establishments (Principal Hub / Global Services Hub)

- - R&D Activities

- - Logistics Services

- - Green Technology Projects

- - Digital Infrastructure

- - Shipbuilding & Ship Repair

- - Aerospace MRO

- - Sterilisation Services

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Company Classification

Category: Manufacturing Services

SME Sales ≤ RM50 million OR ≤ 200 full-time employees Sales ≤ RM20 million OR ≤ 75 full-time employees

MTC Sales RM50–500 million Sales RM20–500 million

Note: Companies with over 20% shareholding by Public Listed Companies, MNCs, GLCs, GLICs, or state-owned enterprises are not eligible.

How DIAF Supports ESG Adoption

The DIAF empowers companies to implement ESG initiatives through:

Financial Assistance: Matching grants reduce the economic burden of ESG projects such as technology upgrades, resource efficiency, and supply chain sustainability.
ESG Self-Assessment: Applicants must evaluate their ESG performance to identify improvement areas before applying.
Training & Resources: MIDA provides workshops and guidance to ensure effective ESG integration.

Benefits of ESG Adoption

Competitive Advantage: ESG-focused companies appeal to customers, investors, and partners who value sustainability.
Long-term Resilience: Sustainable operations lower costs and mitigate risks.
Enhanced Reputation: A strong ESG profile boosts credibility and stakeholder trust.

Application Process

Conduct an ESG Self-Assessment to understand your current standing.
Develop a Project Plan outlining your ESG initiatives.
Submit the Application with the required documentation to MIDA.
Await Approval based on eligibility, funding availability, and project viability.

Real-world Impact

Malaysian companies leveraging the DIAF have already achieved measurable results, such as:

Energy efficiency upgrades that cut carbon emissions by up to 30%.
Community engagement programs strengthen corporate social responsibility.

In summary, the Domestic Investment Accelerator Fund (DIAF) is a pivotal enabler of ESG transformation in Malaysia, empowering local SMEs and MTCs to achieve sustainable growth, enhance their global competitiveness, and contribute to a resilient, future-ready economy.

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