By: greenbank On: May 01, 2020 In: Comments: 0

Malaysian Green Technology and Climate Change Centre (MGTC), formerly known as Malaysian Green Technology Corporation or GreenTech Malaysia, facilitates the GTFS, which was initiated in 2010. GTFS 1.0 was active from 2010 to 2017, and the GTFS 2.0 was launched in May 2018. GTFS 1.0 offered a rebate of 2% per annum on interest or profit rates charged by financial institutions, while also providing a Government guarantee of 60% for the green cost of the financed amount. In addition to providing the GTFS 1.0 finacing facilities, GTFS 2.0 provides financing through green bond (“sukuk”) issuances. An amount of up to RM2.0 billion sukuk issuance is available, with the maximum of RM300 million for each company and a maximum period of 15 years for energy producer companies and 10 years for energy user companies. Apart from the category of producer and user companies benefiting under this scheme, GTFS 2.0 also supports Energy Services Company (ESCOs), where RM1.0 billion has been exclusively allocated to finance investments or assets related to energy-efficient projects and Energy Performance Contract. An ESCO is eligible to secure financing of up to RM25 million for a period of up to 5 years.

Since its inception in 2010, as at May 2020 the GTFS has successfully approved a total of 349 projects with a total financing amount of about MYR4.5 billion or USD1.04 billion. While the Scheme covers projects in various sectors such as Energy, Building, Transport, Waste and Water as well as the manufacturing sector, the bulk of projects approved are in the renewable energy sector which accounted to more than 80% of the loans approved. The approved projects are anticipated to contribute to the avoidance of over 3.7 million tonnes of CO2 equivalent every year. The GTFS has been instrumental in encouraging the participation of private financial institutions to invest in green ventures and it has brought together a total of 29 banks and financial institutions to participate in the Scheme. With increasing numbers of entrepreneurs venturing into the green technology sector, GTFS will continue to be an important enabler bridging financing gaps and empowering emerging green businesses in the country.

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