‘Malaysia set to take lead position in green financing’

KUALA LUMPUR: The future is in green financing and Asia, including Malaysia, is poised to take a leadership position in this sector, given its population growth and acceptance towards creative innovation.

Richard Kooloos, the director of sustainable banking of Amsterdam-based ABN Amro Bank, said at the Economist’s Sustainability Summit Asia 2018 that the bank’s success within the segment could easily be replicated in this region.

“We no longer support or finance projects that are not part of the circular economy. Unlike traditional business models where raw materials were converted into products that you throw away at the end of their life cycle, the circular economy runs on the re-usage of raw materials and products,” he said.

“The new business models need innovative financing. We have clients who subscribe to furniture, so that furniture can have some 30 years life cycle instead of three years. Original furniture subscribers can return the furniture where it would be upholstered and new subscribers can get the furniture. These type of businesses have a different kind of financing as they don’t have a large upfront profit and gains smaller monthly payments.”

The appetite for circular financing in Asia is healthy, given that most countries are growing at an incredibly fast rate.

“In economies like China and emerging countries like Malaysia, we have seen rapid growth of not just existing towns and cities, but also new ones. Circular designs work best in new cities where we can recycle concrete and build new buildings,” said Kooloos.

It is important, however, for banks to find like-minded clients in the early days of attempting circular financing as not all are open to it.

“My advice to them is to look at existing clients and work with the most innovative ones. As their success grows, more companies will come to seek for your advice,” said Kooloos.

Energy, Technology, Science, Climate Change and Environment Minister Yeo Bee Yin said the government was pushing forward with the increase electricity generation from renewable energy (RE) agenda.

“To achieve the 20 per cent RE target that we have set out, large scale solar needs to be added to the system. The government has implemented two LSS project cycles with an installed capacity of 958 megawatts,” she said.