Monday, August 30, 2010

More banks offer green technology financing

Monday August 30, 2010

BY DALJIT DHESI
daljit@thestar.com.my


Environmental business grows
PETALING JAYA: More banks in Malaysia are going into green technology financing in view of the potential market for environmental business amid surging levels of greenhouse gases.
Although green financing has not taken off in a big way in Malaysia compared with developed countries, it has been gaining prominence.
Sumitomo Mitsui Banking Corp (Japan), one of the five foreign commercial banks which recently received licences to operate in the country, has teamed up with the Federation of Malaysian Manufacturers (FMM) to provide US$200mil financing for local manufacturers.
Lim Hong Tat ... ‘Maybank has also financed green projects in the Philippines, Indonesia, China and Vietnam.’
The financing, the first of its kind in the country, would be used to fund various types of “green initiatives” including renewable energy, recycling and waste management projects, according to FMM.
The Government had set up a RM1.5bil Green Technology Financing Scheme (GTFS) under Budget 2010 to encourage the supply and usage of green technologies, especially in energy, water and waste management industries.
CIMB Bank had also teamed up with Credit Guarantee Corp Malaysia Bhd to promote GTFS and would contribute up to RM150mil for the scheme.
On the RM1.5bil GTFS, Energy, Green Technology and Water Minister Datuk Seri Peter Chin was reported as saying the banks had to date approved RM161mil for six companies that planned to reduce carbon by 114,691 tonnes.
So far, a total of 43 projects had been approved for the GTFS, he noted.
HSBC Bank Malaysia Bhd managing director for commercial banking David Morton said as a participant of the scheme, the bank’s relationship managers had been working with customers to identify projects that employed the use of green technology and guide them on the availability of funding via this scheme.
Nirukt Sapru ... ‘Green financing is open to all sectors, including biomass and biofuels.’
The bank had also been running its Commercial Banking Green Campaign since November 2009 to encourage customers to conduct their business in a sustainable manner while reinforcing the bank’s commitment to environmental protection, he added.
The campaign, which ends in October, offers customers special “green financing” rates with HSBC’s Industrial Hire Purchase-i and Leasing-i offering.
On the allocation of loans, Morton said HSBC did not have a limit for this type of financing and it was always on the lookout for suitable proposals for viable projects.
“We encourage any profitable and sustainable business to approach HSBC to apply for financing in this area,” he told StarBiz.
Malayan Banking Bhd (Maybank) deputy president and head of community financial services Lim Hong Tat said the bank was ready to provide advice and financial assistance to companies intending to upgrade their manufacturing process, “green” their premises or go into large-scale implementation of clean development mechanism, biomass and other energy projects.
He did not divulge the amount of financing disbursed or available.
Green projects financed locally by Maybank include waste water treatment plants, solid waste recycling plant, oil palm biomass steam powered generator and construction of green buildings.
The bank had also financed green projects in its operations in the Philippines, Indonesia, China and Vietnam, Lim noted.
Standard Chartered Bank Malaysia Bhd managing director of origination and client coverage, wholesale banking, Nirukt Sapru, said “green financing” was open to all sectors, including biomass and biofuels.
“With our track record, expertise and international network in sustainable financing, we are able to play a key role in Malaysia – as we have done so in other markets in supporting the shift – as more corporates in Malaysia look towards growth and expansion opportunities, leveraging on green financing and best practices,” he added.
Citing some of the challenges in green financing, Morton said although recent events had increased awareness of the importance of sustaining the environment, the strong push and pull factors for companies to go green in Malaysia were relatively absent.
“For companies, the choice of employing ‘green’ technology remains very much profit-driven. Demand for green financing at the moment is relatively slow given its dependence on the pace of adoption of green technology and practices,” he added.
Lim said also said Malaysian businesses should strive to better understand what green technology really meant by engaging experts on the subject.
Meanwhile, ACCA global head of sustainability and corporate social responsibility Henning Dräger said ACCA was actively involved in stakeholder forums and working groups that dealt with green technology finance.
ACCA’s role was to follow developments in this sector on behalf of students who might want to join this industry in the future and inform members of relevant initiatives.
“We are also asked to provide expert input to questions about return on investment for low carbon technologies and carbon accounting frameworks which are part of our sustainability remit,” Dräger added.

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