GreenTech Malaysia eyes RM2.7 billion financing

KUALA LUMPUR: Malaysian Green Technology Corporation (GreenTech Malaysia) aims to see approved financing of RM2.7 billion under the Green Technology Financing Scheme (GTFS) by year-end, from RM2.2 billion as of June 30, 2015.
GreenTech Malaysia CEO Ahmad Hadri Haris (pix) said it is processing RM500 million to RM600 million of financing for 20 to 30 projects. Each project can apply up to a maximum of RM50 million but a typical solar project’s financing is about RM5 million.
“About 75% (of approved financing) is (from) the energy sector, for example solar project, biomass, biogas or small hydro and the balance from green transport, energy efficient building and waste management,” he told reporters at the Green Financing Forum 2015 here yesterday, which was held in conjunction with the International Greentech & Eco Products Exhibition & Conference Malaysia 2015.
The GTFS has approved financing of RM2.2 billion for 188 projects, which are expected to generate RM4.43 billion in green investment in the country.
The approved financing was carried out via 26 participating financial institutions. About 55% of the total finance approved under the GTFS has been in the form of Islamic financing.
Upon commencement of operations, over 3,000 green jobs will be created.
The government continues to facilitate the GTFS, which was initiated in 2010 with an allocation of RM3.5 billion to fund green technology ventures.
“Total (financing to be disbursed) is RM3.5 billion and we expect to reach RM2.7 billion by year-end. Subsequently we hope the government can carry forward and introduce better mechanism to make it more exciting,” said Hadri.
In reality, he said, there are a lot more applications and that it has given up to 400 certificates of green financing but projects that had secured financing stood at only 188.
“There is still a gap and we have to work with the banks to ensure that they feel comfortable to finance them,” explained Hadri.
GTFS offers a rebate of 2% per year on interest or profit rates charged by financial institutions, and provides a government guarantee of 60% for the green cost of the financed amount.
GreenTech Malaysia chairman Tan Sri Peter Chin Fah Kui said it has recommended that GTFS be extended.
“We have asked for additional amount and for this to be extended further. We have proposed through Kettha (Energy, Green Technology and Water Ministry) and for Kettha to take it up (for Budget 2016),” said Chin.
Under the 11th Malaysia Plan, the government has allocated RM15 billion between 2016 and 2020, representing an annual RM3 billion to RM4 billion investment in environmentally sustainable development projects.
Chin said GTFS shows how government incentives, when effectively partnered with private financing, can play a crucial role in triggering the growth of green technology. “Further involvement of public and private finances will be crucial to leverage on this momentum and give traction to the growth of the green sector.”