From Malaysia Factbook
| "Recently, I was shocked to watch the Bloomberg interview with Francis Yeoh where it was revealed by Haslinda Amin that Francis Yeoh has benefitted so much from 'his friend in powerful places' that today 'more than 70% of YTL Corporation's profits come from the power plants'." — Jeffrey Ong (8 September 2011) 
Independent Power Producers (IPPs) in Malaysia were first mooted by the then Prime Minister Tun Dr. Mahathir Mohamad, after a 1992 blackout left the country without electricity for up to 2 days. Mahathir felt that dependency on Tenaga Nasional Berhad, a state monopoly, was unstrategic and as a solution, he decided to deregulate the electricity industry.
2. Workings of IPPs: Consumer electricity passes through 4 stages: (1) generation; (2) transmission; (3) distribution; and (4) retailing. To encourage companies to become Independent Power Producers (IPPs), the Mahathir administration gave these companies very attractive benefits. Apart from a guaranteed purchase at secure prices, Petronas was asked to sell natural gas to these IPPs at subsidized rates, for which the government pays subsidies of up to RM19 billion a year. As these Independent Power Producers (IPPs) only generate electricity, Tenaga Nasional was compelled by the government to buy electricity from these IPPs at prices higher than if Tenaga were to produce it. This made Tenaga Nasional became a very inefficient entity in terms of its operating cost. In 1996, the then Executive Chairman of Tenaga Nasional, Tan Sri Ani Arope chose to resign from his post rather than sign the imbalanced deals. (In 2005, 40.5% of Tenaga Nasional's operating costs were spent on purchasing electricity from IPPs.) As a result, deregulation has created an opposite effect in Malaysia, with consumers having to pay higher electricity tariffs because Tenaga Nasional was forced to buy electricity from IPPs who charged more for the electricity than if Tenaga were to produce it. Thai power producers, on the other hand, do not get subsidies and have to buy fuel at market prices. Yet, despite the higher cost of fuels in Thailand, Thai power producers sell electricity at a lower price than Malaysian IPPs sell to Tenaga Nasional. Thus, it looks like the IPP scheme in Malaysia is essentially a transfer of funds from the people's pockets to the IPP's vaults through Tenaga Nasional, aided and abetted by the government.
3. IPP players: There are about two dozen Independent Power Producers (IPPs) in Malaysia. The first entrants to the Independent Power Producer (IPP) business include:
- Genting Sanyen;
- YTL Power;
- Prai Power;
- Tanjung Bin Power; and
- Kapar Energy.
All of these are owned by Genting's Lim family, Francis Yeoh, Syed Mokhtar Albukhary, and Ananda Krishnan.
The 2010 profits of Francis Yeoh's YTL Power was more than RM1.6 billion on revenues of RM13 billion, while Ananda Krishnan's Powertek had revenues of RM1.34 billion and a profit of RM450 million. Malakoff's profits in 2009 was RM380 million on revenues of RM5.6 billion.
On the other hand, Tenaga Nasional's energy cost grew by 2.4% from RM16,974 million in financial year 2009 to RM17,379 million in 2010. This was mainly due to higher payments to Independent Power Producers (IPPs) totaling RM12,528 million in 2010, an increase of 5.9% as compared to the previous financial year of RM11,827 million).
- Tenaga Nasional Arm-Twisted: In an interview with Starbiz in June 2006, Former Tenaga Nasional (TNB) Chairman Tan Sri Ani Arope characterized the terms of TNB's power purchase agreements as "grossly unfair": 
At 16 sen per unit (kWh) and with the take or pay situation, actually it was 23 sen per unit. Wit 23 sen, plus transmission and distribution costs, TNB would have had to charge the consumer no less than 30 sen per unit. If mixed with TNB's cost, the cost would come down, but that was at our expense because we were producing electricity at 8 sen a unit. We can deliver electricity at 17 sen.
- Tan Sri Ani Arope also said that there was undue intervention in the PPA negotiations between Tenaga Nasional (TNB) and the Independent Power Producers (IPPs). He said, "There was no negotiation. Absolutely none. Instead of talking directly with the IPPs, TNB was sitting down with the Economic Planning Unit (EPU). And we were harassed, humiliated, and talked down, every time we went there. It was well-known that should discussions between TNB and the IPPs reach an impasse over the allocation of risk, discussions would go offline to another level, after which the parties involved would return to the table, as if nothing had happened".
- Some Independent Power Producer (IPP) plants were even built on sites that Tenaga Nasional (TNB) had identified and laid the groundwork for, but for mysterious reasons, they were offered to IPPs. Tan Sri Ani Arope was so cheesed off that he refused to sign the contracts and left TNB in 1996.
- Overcapacity: In a span of 8 months from April to December 1993, the Independent Power Producers (IPPs) commissioned 5 projects totaling 4,157 MW (megawatts), almost 70% of the existing 6,000 MW. This additional capacity grossly overshot demand growth and by January 1997, Peninsular Malaysia had almost 50% in surplus capacity. This excessive level of surplus capacity persist until today, at an estimated 52.7%, based on the 2011 statistics provided by Tenaga Nasional (TNB).
- As of 2011, IPPs accounted for some 35% of Malaysia's total generation capacity but they supplied more than this percentage because Tenaga Nasional's (TNB) own facilities had to be shut down in order to utilize all the IPP power that it had been obliged to purchase under the "take-or-pay" clauses in the lopsided contracts  that was forced down its throat by the Mahathir misadministration.
- Lopsided agreement: The Mahathir misadministration virtually guaranteed the IPPs extraordinary profits, while taking very little risks. Both fuel costs and demand risk are passed on to Tenaga Nasional (TNB). In situations where power demand falls below expectations, TNB is required to pay fixed capacity charges to the IPPs, in according with the "take-or-pay" clauses in the contracts. Studies have shown that the IPPs, which are shielded from financial risks, earn an average of 18-25% rate of return on capital, with some as high as 40%. In addition, TNB is also required to pay for as much as 40% of excess capacity for electricity generation which is often wasted. This arrangement places significant stress on both the consumers, who have the bear the brunt of price increases, as well as the Government, who is forced to increase the subsidy for natural gas supplied to the IPPs at a fixed price of RM6.40 mmBTU, irrespective of market price.