Hong Leong Bank allocates RM500 million in renewable energy financing
KUALA LUMPUR: Hong Leong Bank has committed RM500 million in financing for renewable energy (RE) for the next 4 years to support the government’s goal to increase the share of RE to 20 per cent of the country’s power mix by 2025.
The bank has also allocated part of this financing for SMEs looking to venture into renewable energy, with solar, biogas and small hydropower identified as the key focus areas.
Managing director of business corporate banking Yow Kuan Tuck said, “At Hong Leong Bank, we have identified RE as a commercially viable industry with a significant growth potential taking into consideration that the government has also been actively developing the industry.
“Since we started sustainable financing in RE 15 months ago, we’ve seen tremendous traction in this space. As of August 2019, the Bank has approved close to RM 300 million in financing in which we are confident will exceed the RM 500 million target by the end of this financial year, two years ahead of schedule.”
The bank has approved RM 300 million in financing spans across 20 RE projects of both large corporates and SMEs that generate energy from biogas and solar PV, and will soon start financing small hydropower projects as well. The current sustainable financing ranges at an average of RM10 million to RM15 million per project for non-solar projects.
“We are very receptive to new technology and we attribute this to our ethos of being digital at the core. We have a dedicated renewable energy industry specialist who has done capacity building within the Bank on small hydropower; technology and capacity wise, it is another exciting field we would like to support.
“In fact, a number of developers for small hydropower have already expressed interest in seeking to operate in this segment of RE,” Yow said.
On top of providing tailored financing specific to RE projects, Yow shared that the Bank works closely with its clients and provides value-added services that include advisory in guiding new energy players on warranties and guaranties coverage for equipment as well as help clients evaluate the feasibility and generation capacity of their RE projects.
Yow continued, “As a Bank with a strong Malaysian heritage, we believe in doing our part in developing the RE space. We not only want to continue to support the large energy players and EPCs but also the smaller players who are interested in generating energy from solar PV either for self consumption or under net-metering schemes to encourage and give businesses the ability to go green and make themselves more sustainable.”