03 May, 2018

Accelerating the Growth of Green Technology Industry
May 3, 2018, Kudat, Sabah - The Green Technology Financing Scheme (GTFS) 2.0 was launched in Kudat, Sabah by YB Datuk Seri Panglima Dr. Maximus Johnity Ongkili, the Minister of Energy, Green Technology & Water to accelerate the growth of green technology industry in Malaysia. The Honourable Prime Minister, Dato' Sri Mohd Najib bin Tun Abdul Razak announced in the 2018 budget speech the extension of the Scheme for a period of five (5) years from 2018 to 2022 with a total financing of up to RM5.0 billion.
GTFS was introduced by the Government in 2010 aimed at encouraging local companies and entrepreneurs to be involved in green technology-based projects to support the national green technology agenda. The GTFS was developed with the cooperation of Ministry of Finance, Bank Negara Malaysia, Credit Guarantee Corporation (CGC) and Ministry of Energy, Green Technology and Water to provide companies with access to attractive financing facilities from the Financial Institutions and Malaysia Green Technology Corporation (MGTC) as the implementing agency. GTFS offers a rebate of 2% per annum on interest rates or profits charged by financial institutions, as well as Government guarantees up to 60% of the green cost of the entire cost financed. Since its introduction, GTFS has successfully supported sustainable projects with the participation of 28 financial institutions. As of 31 December 2017, the participating Financial Institutions have approved financing of more than RM3.5 billion spread over 319 projects
Besides providing financing facilities, the new GTFS 2.0 will provide a more attractive package which is financing through green bond / sukuk issuances. Through this facility, an allocation of up to RM2.0 billion for green bond / sukuk issuance, with the maximum limit for each company is RM300 million with a maximum period of 15 years for producer companies and 10 years for user companies. These green bond / sukuk issuance shall be 100 percent guaranteed by Danajamin Financing. Green bond / sukuk producers could also enjoy Government subsidies at a rate of 2% on coupon / profit.
Apart from the category of producer and user companies benefiting under this scheme, GTFS 2.0 also supports companies under Energy Services Company (ESCOs), where RM1.0 billion has been exclusively allocated to this sector for finance investments or assets related to energy-efficient projects and Energy Performance Contract (EPC). Potential company could secure a financing limit of up to RM25 million for a period of up to 5 years. The new scope of financing for ESCO is expected to spur an aggressive kick start to energy efficiency business with now deemed as a new economic growth area in the energy sector. "

YB Datuk Seri Dr Ongkili said " The implementation of GTFS is important to ensure green technology-based projects continue to receive support, which will directly contribute to the growth and development of the green technology industry. With the green technology market in Malaysia growing fast, in tandem with the demand for financing by the industry the Government is committed to ensure the landscape remains attractive. Therefore, GTFS 2.0 is expected to encourage companies to undertake large-scale green projects capable of giving a positive impact to the local green market ", he said