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Domestic Investment Accelerator Fund (DIAF) – ESG Adoption

MIDA DIAF-ESG grant is provided on a 50:50 matching amount up to of RM500,000 per company

matching grant introduced to support Malaysian-owned Small and Medium Enterprises (SMEs) and Mid-Tier Companies (MTCs) in the manufacturing and selected services sectors in their transition towards ESG practices.

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Applications received by the Malaysian Investment Development Authority (MIDA) until 31 October 2026 will be considered for this grant. Approval is subject to the availability of funding and allocation by the Government of Malaysia, as well as prevailing policies in force.

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The project must be completed within 12 months from the date of the Acknowledgement Letter, which is the effective date of the grant period.

OBJECTIVES

The main objectives of this grant are:

  1. To facilitate and assist SMEs and MTCs to transition into ESG practices through validation and verification of ESG adoption

  2. To ensure compliance and transparency through certification and disclosures aligned with recognized ESG standards.

  3. To promote digital ESG solutions by supporting the subscription and use of technology systems/software for ESG tracking and data collection.

  4. To strengthen ESG Capabilities with targeted capacity building training programs

ELIGIBLE EXPENDITURES

Eligible expenditures incurred related to the adoption of ESG practices based on the following activities:

  1. Costs related to validation, verification, and/or certification for ESG adoption

  2. Costs related to tracking of carbon emissions and ESG disclosures

  3. First year’s subscription of system and/ or software for data collection and tracking of ESG adoption and/or GHG emissions

  4. Costs related to capacity building training for ESG practices, limited to training fees, training materials and/or ESG-related professional certifications fees (for employees) only.

ELIGIBILITY CRITERIA

  1. incorporated under the Companies Act, 2016.

  2. At least 51% Malaysians.

  3. A valid Business Licence from the respective Local Authority.

  4. Manufacturing activities where the company must possess a valid Manufacturing Licence (ML) from MITI or the Confirmation Letter for Exemption from ML from MIDA

  5. In operation for at least 3 years.

  6. Categorised as SME or MTC

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APPLICATION PROCEDURES

The application process is as follows: First, the company must complete an ESG self-assessment through the MIDA Sustainability Portal before applying for the grant. Companies must answer at least 50% of the questions in each ESG category and complete the disclosure section. After receiving the assessment report, the company should engage qualified service providers or vendors and obtain quotations for the ESG-related expenses. The grant application must then be submitted through the MIDA InvestMalaysia Portal together with the ESG reports, quotations, and supporting documents. A non-refundable processing fee of RM3,000 is required before submission. Once submitted, MIDA will issue an acknowledgment letter. Successful applicants will receive an approval letter and grant agreement, which must be signed and returned to MIDA within 60 working days, or the offer may be cancelled. Below is the Processing Flow:

Process Flow for ESG Grant.jpg

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Disbursement of grant

Successful applicants must complete the approved ESG project and submit the required claim documents within the given timeline. After the project is completed, companies need to redo the ESG self-assessment through the MIDA Sustainability Portal and submit the updated report together with the grant claim via the MIDA InvestMalaysia Portal. The submission must also include the ESG report prepared by the approved service provider or vendor, showing the company’s ESG gap analysis and findings. MIDA will then review and audit the project expenses before presenting the findings to the grant committee for approval. Once approved, the grant payment will be released to the company.

Process Flow Grant Disbursment.jpg

Let Our Experts Assist with Your ESG Grant Application

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The opportunity to apply for this grant is limited, so businesses planning to adopt sustainable and ESG practices are encouraged to start early. As the application process can be challenging, our experienced team is ready to assist you with eligibility checks, documentation preparation, and application submission to help improve your chances of approval.

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