Min­istry mulls in­sti­tu­tion to han­dle green fi­nanc­ing

The Sun (Malaysia) - - SUNBIZ -

KUALA LUMPUR: The En­ergy, Green Tech­nol­ogy and Wa­ter Min­istry (KeTTHA) may set up an in­sti­tu­tion to han­dle green fi­nanc­ing if the re­main­ing RM1.7 bil­lion avail­able un­der the Green Tech­nol­ogy Fi­nanc­ing Scheme (GTFS) is taken up quickly.

“The Fi­nance Min­istry has been look­ing at that for some time. There are still a lot of pro­cesses to be done but with the in­com­ing of green sukuk, that has given a boost of con­fi­dence in the fi­nance sec­tor. We are analysing the first GTFS. It will de­pend on the re­sponse,” said En­ergy, Green Tech­nol­ogy and Wa­ter Min­is­ter Datuk Seri Pan­glima Dr. Max­imus Johnity Ongk­ili.

Speak­ing to re­porters at the opening cer­e­mony of the 8th In­ter­na­tional Green­tech & Eco Prod­ucts Ex­hi­bi­tion & Con­fer­ence Malaysia (IGEM 2017), Ongk­ili said the pro­posal for an in­sti­tu­tion is worth con­sid­er­ing but it would have to study the market be­fore turn­ing the scheme into a bank, for in­stance.

“I think it is cer­tainly on the agenda. We need to work at it. Num­ber one is the mech­a­nism, num­ber two is the size. These are im­por­tant. My own take is, if the re­main­ing RM1.7 bil­lion is fin­ished quickly, then it is time to set up a proper in­sti­tu­tion to han­dle green fi­nanc­ing,” he added.

The GTFS was in­tro­duced by the gov­ern­ment in 2010, aimed at en­abling eas­ier ac­cess to fi­nanc­ing for new green en­trepreneurs. To date, it has fa­cil­i­tated over RM3.385 bil­lion in funds for more than 302 green projects. Upon com­ple­tion, these projects will have the po­ten­tial to gen­er­ate RM6.468 bil­lion worth of green in­vest­ments, cre­ate over 4,943 jobs and avert emis­sions amount­ing to 3.513 mil­lion tonnes of CO2eq.

There is an­other RM1.7 bil­lion avail­able un­der the scheme and the gov­ern­ment has de­cided to ex­tend the scheme, adding an­other RM5 bil­lion for the next five years, to pro­vide ac­cess to more en­trepreneurs.

Mean­while, Bank Ne­gara Malaysia, Se­cu­ri­ties Com­mis­sion Malaysia and the World Bank Group are cur­rently de­vel­op­ing an ecosys­tem to fa­cil­i­tate the growth of the clean fi­nanc­ing port­fo­lio to fur­ther pro­mote green fi­nanc­ing. Ongk­ili said the green sukuk has in­tro­duced an in­no­va­tive fi­nan­cial in­stru­ment to ac­com­mo­date global in­fra­struc­ture needs and green fi­nanc­ing.

On the num­ber of bonds to be is­sued un­der the green sukuk, he said it would de­pend on those who won the bid­ding. – by Eva Yeong

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