Frequently Asked Questions

Frequently Asked Questions on the Green Technology Financing Scheme (GTFS)

The GTFS is a special financing scheme introduced by the government to support the development of Green Technology (GT) in Malaysia. It was proposed by the Right Honourable Prime Minister during the tabling of the 2010 Budget with a total financing amount of RM1.5 billion. Subsequently, in Budget 2013, with YAB Dato' Seri Mohd Najib Tun Haji Abdul Razak announcing that the fund for GTFS will be increased by RM2 billion and the application period extended for another three years ending 31 December 2015. During the Budget 2016 speech on 23 October 2015, YAB Prime Minister once again had announced the extension of the implementation period of the Green Technology Financing Scheme (GTFS) until 31 December 2017.

GTFS is a soft loan supported by the government; the treatment of the loan is similar to that of normal loans, where the borrower must repay the loan to the bank throughout the tenure period.

No fee will be charged, as GTFS is a scheme supported by the government.

The GT policy has clearly defined that any product, equipment or system which satisfies the following criteria is categorized as GT;

i. Minimises the degradation of the environment
ii. Reduces greenhouse gas emissions
iii. Safe for use and promotes a healthy and improved environment for all forms of life
iv. Conserves the use of energy and natural resources and;
v. Promotes the use of renewable resources

For further detailed information on the project criteria please refer to GTFS operational guidelines.

The four key sectors are:

i. Energy
ii. Water and waste management
iii. Building
iv. Transport

Yes, they can. However, it cannot be for the same project, it has to be either for an expansion or a new project but limited to the maximum amount determined (ie user RM 10 million and producer *RM 50 million).

*effective from 3 June 2016, the maximum limit under PRODUCER category has been increased to RM100 million per company.

developers in relation to this scheme?
All RE on-grid project developers, who are interested in applying for the GTFS, must ensure that they have received prior approval from the Sustainable Energy Development Authority (SEDA) for Feed-in Approval. Without the said approval GreenTech Malaysia will consider the submission incomplete.

All cost components falling under the Green Technology criteria is eligible for financing under GTFS.

Yes. The working capital financing however limited for the purchase of raw materials and the limit is up to a maximum of RM5.0 million only for each company. The RM5.0 million limit is part of the maximum financing limit for each categories i.e Producer and User.

Subject to the PFI's approval, the working capital financing is only limited to 5 years.

Financing existing/commissioned projects are allowable under GTFS with the condition that the financing is not for existing property, plant & equipment (PPE) (refinancing). The application for GTFS can be for the financing of new PPE for retrofitting/improvement to the existing facility or plant.

No, GTFS can only finance projects which are ready for commercialization.

No, the Certificate cannot be transferred to any other company. The new company have to reapply to GreenTech Malaysia should they be interested to continue with the GT project.

An application may be rejected if the applicant fails to satisfy any of the following;

i. Application form contains fraudulent information.
ii. The information or data provided is insufficient or does not support the application (e.g. Project has no significant impact (item B.9), Item D.1: difficult to measure outcome therefore monitoring and verification is not possible etc).
iii. Supporting documents are insufficient (e.g. no Feed-in Approval in the case of RE on-grid projects, no tenancy agreement, no sale and purchase agreement etc.).
iv. The applicant does not provide feedback (i.e. explanation / additional information) to the GTFS secretariat within 3 working days from date of request.

i. Application form is incomplete.
ii. Information or data provided are wrong or wrongly supplied (e.g. Outcome in item B.9 is not clear, Item D.1 is not clearly explained ie on how to monitor or measure the impact).
iii. Information is invalid or not applicable (e.g. Fuel supply agreement not valid, tenancy agreement not signed etc.).
iv. Supporting documents are not sent or insufficient (e.g. no supporting documents to technology partner, calculation for item B.9 not supplied, etc).

The types of projects eligible for GTFS can include (but is not limited to) the following:
a. Energy sector
i. Energy supply sector
Power generation and energy supply side management including co-generation by the industrial and commercial sectors
ii. Energy utilization sector
Energy utilization sector and demand side management programmes
b. Building sector
Construction, management, maintenance and demolition of building
c. Water and waste management sector
Management and utilization of water resources, wastewater treatment, solid wastes and sanitary landfills
d. Transportation sector
Public transportation infrastructure, “green” vehicles, and biofuels.
For further information on the type of projects please refer to GTFS operational & guidelines.

Yes, because that projects support the GT policy objectives.

This scheme is only applicable for new, retrofitting or expansion projects that incorporate GT elements which have not been funded and / or partly funded. The GTFS will not accept applications for projects which are already underway, in construction (physical progress) or which have already been completed / commissioned.

All companies (either users or producers) interested in developing GT projects are welcomed.

Yes, they can apply up to the maximum eligibility (ie users RM 10 million and producers *RM 50 million).

*effective from 15 June 2016, the maximum limit under PRODUCER category has been increased to RM100 million per company.

No, because the scheme comes in a package. Without the guarantee the project risk will be too high, which may result in the financial institution (FI) rejecting the loan application.

The GTFS operates via e-application. Applicants have to apply online at www.gtfs.my

Yes, the guidelines or handbook of the GTFS are accessible at www.gtfs.my.

GreenTech Malaysia as the focal point for GT projects, it will monitor these projects.

Application Process:

A. Project Certification (Technical)
All applications shall be submitted to GreenTech Malaysia. GreenTech Malaysia will screen and evaluate all complete and valid applications. Should the GTFS team require clarification on any issue or matter during the evaluation period, applicants must furnish the information within 3 working days from the date of notification. Applicants will be invited for a Business Review Presentation meeting to present the viability of their business models, product market, potential project financial performance, company management and the company's exit strategy. The project will be tabled at the GTFS Committee (GC) meeting for final approval. GreenTech Malaysia will issue a notification letter to successful and non successful applicants. A successful applicant will be issued with a Green Project Certificate.

B. Financing Application
A successful applicant can apply for financing under the GTFS with the Green Project Certificate and all necessary documentation to any participating FI. Applicants should follow and comply with the procedures and guidelines of the selected FI. FI will issue a Letter of Offer (LO) to a successful applicant. The government will bear 2% of the total interest rate or profit.

C. Guarantee Approval
Credit Guarantee Corporation Malaysia Berhad (CGC) will provide a guarantee of 60% on the financing amount offered by the FI (GT value only). Upon guarantee approval, CGC will issue a Letter of Guarantee to the Applicant and charge a guarantee fee of 0.5% per annum on the amount. Copy of the letter will be sent to the respective FIs and GreenTech Malaysia.

D. Financing Execution
i. Agreement and Documentation
Upon receipt of the Letter of Guarantee from CGC, the FI will proceed with financing agreement.

E. Fund Disbursement
Fund disbursement will be in accordance to the selected FI’s procedures.

F. Project Outcome
i. Project Monitoring and Verification
Applicant shall submit a monthly Project Progress Report to GreenTech Malaysia during project implementation. Upon commissioning, the applicant shall submit a Project Outcome Report every six months to GreenTech Malaysia. The format and period shall be specified by GreenTech Malaysia.

G. Project Impact
Upon completion of Project Monitoring and Verification, an applicant shall submit a project Impact study in accordance to the format specified by GreenTech Malaysia.

For further detailed information please refer to GTFS operational & guidelines.

The interest rate charged is determined by the participating FI. The Government will bear 2 % of the total interest/profit charged by the FI.

The other benefits that can be obtained are as follows:

i. Interest subsidies of 2% from the total interest rate charged.
ii. Government guarantee of 60% on the total approved loan.
iii. Training will be provided to applicants to enhance their knowledge on GT

The GTFS has been available since 1 January 2010 and will be available till end of 2017 or upon complete utilization of the RM3.5 billion loan, whichever is earlier.

The technical evaluation process takes approximately 21 working days commencing from the day complete and valid application is received by GreenTech Malaysia until the issuance of the letter of Project Certificate by GreenTech Malaysia. While the financing process typically (financing and guarantee) takes approximately 30-60 working days.

The margin of financing will be decided by the participating FIs, however the maximum financing amount that can be offered to producer companies is RM 100 million and RM 10 million for user companies.

*effective from 15 June 2016, the maximum limit under PRODUCER category has been increased to RM100 million per company.

The security and collateral of the financing depends on the requirement of the participating FIs.

Yes, the GTFS call center will provide assistance on GTFS-related matters. The contact details of the hot line is 1-800-88-4837.

The documents required are as follows:

i. Memorandum & Articles of Association of applicant
ii. Attachment - certified copy of Form 9, 24, 49
iii. Collaboration / joint venture agreement with other project partner(s), authorisation letter from technology provider
iv. Approved layout drawing indicating the project boundary
v. Project Management Team structure
vi. Team member CV, employment contract or latest EPF receipts as evidence of employment
vii. Full technology specification, track record, relevant approved engineering drawings etc.
viii. Project implementation schedule and key milestones (if indicated in separate sheet)
ix. Please provide necessary approval document (if required for project implementation)
x. i.e. Environment Impact Assessment,
xi. Sales and Purchase Agreement,
xii. Tenancy Agreement, Development order,
xiii. Safety, Fuel Supply Agreement etc.
xiv. Calculation of project outcome
xv. Soft Copy of the spreadsheet for calculation of cash flow and IRR (with relevant supporting document)
xvi. Relevant approved drawings to support explanation

No. However, the following are eligible:

i. Producer company: Legally registered Malaysian-owned companies (at least 51% Malaysian shareholding) in all economic sectors
ii. User company: Legally registered Malaysian-owned companies (at least 70% Malaysian shareholding) in all economic sectors

Financing tenure for this scheme will be 10 years for users and 15 years for producers.

Besides the GTFS, during the 2010 Budget announcement, the government appointed GreenTech Malaysia as the focal point to set standards and promote green technology projects. Several programmes have been introduced as follows:

i. The yearly International GreenTech and Eco Products exhibition (IGEM)
ii. The development of Putrajaya and Cyberjaya as green townships
iii. Introduction of green technology standards for government procurement.