An Energy Service Company — commonly known as an ESCO — is a specialist firm that identifies, designs, implements and guarantees energy savings for buildings and facilities. Unlike a standard energy consultant who provides recommendations, an ESCO takes on the performance risk: if the promised savings are not delivered, the ESCO bears the financial consequences. This model makes ESCOs one of the most powerful tools available to Malaysian building owners who want to reduce energy costs without upfront capital risk.
Malaysia has a formal ESCO registration framework managed by the Malaysia Green Technology Corporation (GreenTech Malaysia) and the Malaysia Association of Energy Service Companies (MAESCO). Registered ESCOs in Malaysia must meet strict technical, financial and professional requirements before they can offer guaranteed energy savings contracts. Cofreth is one of Malaysia's longest-established registered ESCOs, having pioneered energy performance contracting in the country since the early 2000s.
How Does Energy Performance Contracting Work? Energy Performance Contracting (EPC) is the financial mechanism through which an ESCO delivers its services. The process works as follows. First, the ESCO conducts a detailed Investment Grade Energy Audit (IGA) of the building to identify all viable energy savings opportunities and quantify the expected savings with high accuracy. Second, the ESCO designs and implements the energy conservation measures — which may include HVAC upgrades, lighting retrofits, building automation systems, variable speed drives and other interventions. Third, the ESCO guarantees a defined level of energy savings over the contract period, typically 5–10 years. If actual savings fall short of the guaranteed amount, the ESCO compensates the difference. Fourth, the cost of the energy improvements is repaid from the savings generated — meaning the project is often cash-flow positive from day one.
Cofreth's EPC model is branded as CoPC — Cofreth Performance Contracting. Under CoPC, building owners receive guaranteed energy savings with zero upfront capital outlay. The energy savings fund the project cost, and any savings above the guaranteed threshold are shared with the building owner.
Capped and Guaranteed Energy Efficiency Performance (CEEP) is a variation of EPC pioneered in Malaysia by Cofreth — the first ESCO in the country to offer this model. Under CEEP, the building owner's energy costs are capped at a defined maximum, providing full protection against energy price increases while guaranteeing a minimum level of savings.
Why Does This Matter for Malaysian Buildings? Malaysia's energy tariffs have increased significantly over the past decade, and buildings face growing pressure to reduce carbon emissions under national sustainability commitments. For large energy consumers — airports, data centres, hospitals, hotels, universities and government buildings — the savings from a well-structured EPC contract can amount to millions of ringgit over the contract period.
Cofreth was the first ESCO to win 1st Prize at Malaysia's National Energy Awards (NEA) in 2018, and was awarded NEA EPC Champion in 2021. We have delivered guaranteed energy savings across some of Malaysia's most energy-intensive facilities. Contact Cofreth to find out how much your building could save.
