1. DFIs in Financing Green Technology: The Malaysian Experience
Wan Azhar Wan Ahmad
Chief Executive Officer
Credit Guarantee Corporation Malaysia Berhad
26 April 2012 1

2. 1.0 Introduction Green Economy in Malaysia
New Economic Model (NEM) - Malaysia aims to create a high income, inclusive and sustainable society for its citizens.
Focus on:
Sustainability from climate change
Sustainability from environmental impact
Growing acceptance that natural resources are limited
2015 targets Source: Social Aspects of Green Tech Goal in Malaysia by Dr Adnan Hedri, USM, 11 October 2011 for United Nations Research Institute for Social Development
Current : 2% of GDP from green business & 95,000 green jobs
By 2015 : 8% of GDP from green business & 500,000 green jobs

3. 1.0 Introduction GT Goals in 10th Malaysia Plan
2010
2015
2020
Increased public awareness & commitment for adoption and application of GT;
Widespread availability & recognition of GT;
GT becomes preferred choice in procurement of products and services;
Larger local market share against other technologies.
Widespread adoption of GT reduces overall resource consumption while sustaining national economic growth;
Expansion of research, development & innovation activities on GT
Increased production of local GT products;
Expansion of local SMEs on GT into global markets; and
Expansion of GT applications to most economic sectors
Malaysia becomes major producer of GT in global market
Increase foreign & domestic direct investments (FDIs and DDIs) in GT manufacturing and services sectors; and
Significant reduction in national energy consumption;
Short-term Goals
Short-term Goals
( )
Medium-term Goals ( )
Medium-term Goals
Long-term Goals
Long-term Goals (Beyond 2020)
Marketing & Promotion
FOCUS AREA OF DFI FINANCIAL SUPPORT
Development & Production
Short-term Goals:
Increased public awareness & commitment for the adoption and application of GT through advocacy programmes;
Widespread availability and recognition of GT in terms of products, appliances, equipment and systems in the local market through standards, rating and labeling programmes;
Increased foreign and domestic direct investments (FDIs and DDIs) in GT manufacturing and services sectors; and
Expansion of local research institutes and institutions of higher learning to expand Research, Development and Innovation activities on GT towards commercialisation through appropriate mechanisms.
Investment

4. National Green Technology Policy
2.0 Landscape of Green Economy in Malaysia
Introduction of Ministerial Portfolio
Ministry of Energy, Green Technology and Water in 2009
Formulation of National Policy Statement
National Green Technology Policy overseeing ‘greening’ in 4 sectors: energy, buildings, water and waste management and transportation
ENERGY
ENVIRONMENT
ECONOMY
SOCIAL
Seek to attain energy independence and promote efficient utilization
Conserve and minimize impact on environment
Enhance national economic development through use of technology
Improve quality of life for all
4 Pillars of
National Green Technology Policy
• Introduction of a ministerial portfolio in the Federal administration Established Ministry of Energy, Green Technology and Water (replacing Ministry of Energy, Water, and Communications);
• Formulation of a national policy statement on green technology –The central role of green technology was emphasized by the release of the National Green Technology Policy overseeing ‘greening’ in four sectors, namely energy, buildings, water and waste management and transportation; •
Source: Social Aspects of Green Tech Goal in Malaysia by Adnan Hedri, USM, 11 October 2011 for United Nations Research Institute for Social Development

5. 2.0 Landscape of Green Economy in Malaysia
Establishment of Implementing Agency
Malaysian Green Technology Corporation
Formation of National Green Technology and Climate Change Council
Coordinate issues of green technology between Ministries, agencies, private sector & other stakeholders in ways to implement policies.
Registration of a Green Building Association
Malaysia Green Building Confederation (MGBC) launched Green Building Index to enable green grading & certification of Malaysian buildings.
Initiation of a Green Financing Scheme
Green Technology Financing Scheme to attract innovators and users of green technology.
Launching of Green Township Framework
Outline comprehensive guidelines for new and existing townships to go green by incorporating environmental friendly technologies.
• Establishment of an implementing agency –On October 2009, Malaysia’s Energy Centre was restructured and rebranded as the Malaysian Green Technology Corporation to implement the Ministry’s agenda for green technology;
• Formation of an inter‐ministerial council as a decision‐making body on green technology – Prime Minister established and chaired the Green Technology Council with senior memberships from government and public sectors. The Council was later merged with the Climate Change Council;
• Registration of a green building association –Malaysia Green Building Confederation (MGBC) was established in 2009 to support the government’s objective of promoting sustainable built environment. The Green Building Index had also been launched to enable green grading and certification of Malaysian buildings;
Source: Social Aspects of Green Tech Goal in Malaysia by Adnan Hedri, USM, 11 October 2011 for United Nations Research Institute for Social Development 5

6. 2.0 Landscape of Green Economy in Malaysia
Efforts on Green Economy
Introduction of Green Procurement in all government agencies
Green procurement manual, procedures & standards are currently under development
Formulation of Legislation to promote Renewable Energy
The Renewable Energy Act 2011 (Act 725) and Sustainable Energy Development Authority (SEDA) Act 2011
Formulation of Low Carbon Green Growth Act is currently underway
Examples of Govt support :
COP15: Committed to reduce carbon emissions up to 40% by 2020
Development of Putrajaya & Cyberjaya as green townships
Priority to Environment-friendly goods in Govt procurement
National Eco-labeling programme by SIRIM
Annual International Greentech & Eco Products Exhibition & Conference Malaysia (IGEM)
United Nations data shows Malaysia's carbon emissions in 2006 stood at 187 million tonnes or 7.2 tonnes from each Malaysian.
• Initiation of a green financing scheme –In 2010, a soft loan incentive, the Green Technology Financing Scheme was launched to create a policy environment that will attract innovators and users of green technology;
• Launching of green townships framework ‐ Green Township Framework would outline comprehensive guidelines for new and existing townships in the country to go green by incorporating environmental friendly technologies;
• Introduction of green procurement in all government agencies ‐ Green procurement manual, procedures and standards are currently under development
• Formulation of legislation to promote renewable energy –The Renewable Energy Act 2011 (Act 725) provides for the establishment and implementation of a special feed‐in‐tariff system to catalyse the generation of renewable energy in Malaysia. The law will be administered by the Sustainable Energy Development Authority.
• Formulation of Low Carbon Green Growth Act is currently underway – as mentioned in the Malaysia-European Union dialogue on green technology and low carbon growth was held on 12 October 2011 in Malaysia.
COP th session of the Conference of the Parties to the United Nations Framework Convention on Climate Change in Copenhagen

7. 3.0 Green Financing for SMEs Green Technology Financing Scheme (GTFS)
Objective - to promote investments in GT :
Minimises degradation of environment;
Has zero or low green house gas (GHG) emission;
Safe for use & promotes healthy and improved environment for all forms of life;
Conserves use of energy & natural resources; or
Promotes use of renewable resources.

8. 3.1 GTFS – Implementation Role
BNM
Act as coordinator for GTFS
MGTC
Verify technical feasibility of project prior to financing processes by FIs.
Upon approved, issue ‘Project Certification’ to applicant.
CGCMB
To provide g’tee support & pay FIs claims on g’teed loans according to risk sharing / g’tee cover through CGC.
To reimburse 2% interest subsidy to FIs for financing granted under scheme
MOF
To manage, administer & monitor GTFS on behalf of MOF – include processing guarantee applications & claims.
To submit monthly & quarterly reports on scheme performance to GreenTech Malaysia, BNM & MOF
Malaysian Green Technology Corporation (MGTC)

9. MEACP - Maybank Middle East & Asia Capital Partners Pte Ltd
3.2 GTFS – Performance
Additional to GTFS, other financial assistance provided specifically for greentech companies in Malaysia are:
Malaysia Debt Ventures:
aims to disburse RM300 mil. within a year from May 2011.
for startups and existing companies that produce green tech products.
Maybank MEACP Clean Energy Master Fund
aims to invest in diversified portfolio of clean energy projects in Asia-Pacific region.
10 year fund size of RM 1.6 bil. (effective Nov. 2011)
MDV – to date have approved RMXX mil to xx customers.
Maybank MEACP - clean energy projects in Asia-Pacific region, focusing on China, India, Indonesia, Malaysia, Thailand, the Philippines, Vietnam, Cambodia and Laos.
- 1st deal expected to close July 2012.
MEACP - Maybank Middle East & Asia Capital Partners Pte Ltd 9

10. 4.0 Challenges Issues hampering the take-up rate of GTFS
Lack of familiarity in GT among local companies and banks as GT is still new.
R&D is expensive and skills are difficult to obtain for local companies compared with MNCs.
Lack of track record or entrepreneurs have not secured long term contracts with reputable buyers.
Government guarantee of 60% still low for FIs.

11. 5.0 Possible Solutions Initiatives to Address Challenges
Green Procurement and IGEM
Government will implement Green Procurement and PMS for Energy.
IGEM helps business matching for green tech entrepreneurs.
Education and awareness at all levels
Country-wide seminars/workshops are continuously held with key stakeholders.
Training for FIs
Address gap in bank officers’ skill sets and understanding.
Program established by the Institute of Bankers Malaysia (professional & education body for banking and finance industry in Malaysia).
Monitoring of all policies and initiatives
By Green Technology and Climate Change Council.
IGEM - International Greentech & Eco Products Exhibition & Conference Malaysia
Chaired by the Prime Minister of Malaysia and supported by 8 Working Committees

12. 6.0 Conclusion GT still in infancy stage in Malaysia.
Constantly seeking to improve and learn from experts in this field.
CGC working closely with FIs and Government to avail access to GTFS.

13. Thank you